QAEconomics › How does a socialist government with a command economy manage its economy?
Q

How does a socialist government with a command economy manage its economy?

A. The government lets producers set wages for workers.

B. The government owns all homes and other forms of housing.

C. The government allows consumers to make their own choices.

D. The government controls factories and other forms of production.

A

Answer: D. The government controls factories and other forms of production.

A command economy is a kind of economic system in which the government is the center stage of all economic activities. In other words, they play a major role in influencing the economy. The levels of production permissible, the prices of goods and services, and all decision-making is dictated by the central government. A command economy is the opposite of a free market system.

In a government, the means of production are owned and controlled by the state. This is the reason a socialist government will be the main practitioner of a command economy. Some countries with command economies are North Korea, Cuba, and the former Soviet Union. There is no private sector in a command economy, private ownership of land and capital does not exist, as the government owns and controls all forms of businesses in the region. Most countries today practice a mixed market economy.

6 months ago
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