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In a command economy, what determines what to produce?
Economics
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Answer
D
The choice of what to produce in a command economy is determined by the central government. In a command economy, also known as a planned economy, the government or a central authority makes all major decisions regarding the production and distribution of goods and services.
- A) industrial establishments: These operate under the direction of the central government in a command economy.
- B) labour unions: Labour unions represent workers but do not typically determine production choices in a command economy.
- C) the government and labour unions: While the government is involved, labour unions do not share the primary decision-making power for production in a command economy.
- D) the central government: This is the defining characteristic of a command economy, where the central government plans and controls economic activity.
The correct option is D.
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