In a command economy, what goods and services are produced, how they are produced, and for whom they are produced are all questions answered by government planning. The government makes economic decisions for the good of society.
Who answers the three economic questions in a traditional economy?
Key terms. In its purest form, a market economy answers the three economic questions by allocating resources and goods through markets, where prices are generated. In its purest form, a command economy answers the three economic questions by making allocation decisions centrally by the government.
Who controls the economy in a command economy?
the government
In a command economy, the government controls major aspects of economic production. The government decides the means of production and owns the industries that produce goods and services for the public.
What are the 3 basic economic questions in a command economy?
Compare how traditional, command, and market, economies answer the 3 economic questions of: What to produce? How to produce? For whom to produce?
Who has a command economy?
The command economy is a key feature of any communist society. Cuba, North Korea, and the former Soviet Union are examples of countries that have command economies, while China maintained a command economy for decades before transitioning to a mixed economy that features both communistic and capitalistic elements.
What are the 3 basic economic decisions?
The three basic decisions made by all economies are what to produce, how it is produced, and who consumes it.
What is a good economic question?
What does the government spend its money on? Who does the government owe money to? Where does the money come from? Does a devaluation help the economy?
Why is North Korea a command economy?
North Korea is a command economy because the government controls every aspect of the nation’s economy, including wages and prices.
