Asked by daddy
Look at the statement and answer the question below:
“The government decides what will be produced and how much it will cost.”
What economy does this sound more like?
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Group of answer choices
Traditional Economy
Market Economy
Command Economy
Flag question: Question 3
Question 3100 pts
Explain your reasons for selecting your answers to number 1 and 2.
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All Answers 1
Answered by
GPT-5 mini
AI
Answer: Command Economy.
Explanation:
- The statement says the government decides what is produced and sets prices. That describes central planning — the defining feature of a command economy.
- In a market economy, private firms and consumers determine production and prices through supply and demand, not the government.
- In a traditional economy, production decisions follow customs and tradition (often subsistence or barter), not centralized government directives.
- Examples of command economies include the Soviet Union and North Korea, where the state controlled output and pricing.
Explanation:
- The statement says the government decides what is produced and sets prices. That describes central planning — the defining feature of a command economy.
- In a market economy, private firms and consumers determine production and prices through supply and demand, not the government.
- In a traditional economy, production decisions follow customs and tradition (often subsistence or barter), not centralized government directives.
- Examples of command economies include the Soviet Union and North Korea, where the state controlled output and pricing.
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