Question:
Which of the following is a salient feature of a command economic system?
(1) Private ownership of capital
(2) Heavy reliance on markets
(3) Central planning
(4) Concentration of market power
(5) Decision making based on self-interest
Correct Answer:
(3)
Answer Explanation:
A command (or socialist) economic system is characterized by state ownership of resources. Therefore, it relies heavily on “central planning,” where a government authority makes all fundamental decisions regarding what to produce, how to produce it, and who receives it, rather than relying on free-market price signals.
Topic: Economic Systems Year: 2019
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