Which of the following differentiates a command economy from other types of economies?

Question

A) centralized economic planning by a government
B) a combination of private sector initiatives and government involvement in the economy
C) the absence of government intervention
D) a reliance on customs and local practices

Answer 1

The option that differentiates a command economy from other types of economies is:

A) centralized economic planning by a government

In a command economy, the government makes all decisions regarding the production and distribution of goods and services, as opposed to market economies or mixed economies, which involve varying degrees of market forces and private sector initiative.