Which events would be more common in a command economy than a market economy? Select all that apply.
A. Price controls
B. Government subsidies
C. Limited competition
D. Free trade agreements
E. Private ownership of businesses
In a command economy, the following events would be more common than in a market economy:
1. Central planning: In a command economy, the government or a central authority decides what to produce, how to produce it, and for whom to produce. This centralized planning is more common in a command economy than in a market economy.
2. Price controls: Command economies often have more price controls, where the government sets maximum or minimum prices for goods and services. This is done to regulate the market and ensure affordability or stability.
3. State ownership: Command economies typically have a higher degree of state ownership of industries and resources. The government owns and controls the means of production, including businesses, factories, and natural resources.
4. Limited consumer choice: In command economies, there may be limited options and variety in consumer goods and services. The government controls what is produced and available to consumers, compared to a market economy where consumer demand and competition drive product diversity.
Therefore, the events more common in a command economy than a market economy would be: central planning, price controls, state ownership, and limited consumer choice.
To determine which events would be more common in a command economy compared to a market economy, let's consider the characteristics and principles of these economic systems.
A command economy is a system in which the government or a central authority has control over the allocation of resources, production decisions, and distribution of goods and services. In contrast, a market economy is based on the principles of individual economic freedom, with prices and production determined by supply and demand in the market.
Based on these differences, the following events are more likely to occur in a command economy:
1. Government-controlled production: In a command economy, the government decides what goods and services will be produced and in what quantities. This means that the government can prioritize its preferred industries or sectors, resulting in certain production focuses.
2. Central planning: In a command economy, there is a central planning authority that coordinates and regulates economic activities. The planning authority sets production targets, determines prices, and allocates resources according to its directives.
3. State ownership: In a command economy, the state often owns or controls major industries and enterprises, such as utilities, transportation, and infrastructure. As a result, the government wields significant control over the means of production.
4. Limited consumer choice: In a command economy, there is typically a limited range of goods and services available to consumers, as the government determines what is produced and supplied. Consumers may have fewer choices and less influence over the variety of products in the market.
Based on these characteristics, the events that are more common in a command economy are:
- Government-controlled production
- Central planning
- State ownership
- Limited consumer choice
It's important to note that these events are not exclusive to command economies and may exist to varying degrees in mixed economies as well.