Which statement best describes a command economy?
individuals make most economic choices
Market forces decide most economic questions
The government controls most economic activity
Business determine most economic outcomes
Early civilizations of east Asia pre-test
The government controls most economic activity
The statement that best describes a command economy is: "The government controls most economic activity." In a command economy, the government has significant control over economic decisions, including resource allocation, production levels, and pricing. This system often involves central planning and government ownership or control of key industries and resources.
To determine which statement best describes a command economy, we need to understand what a command economy is.
A command economy is an economic system where the government has direct control over most economic activities. In a command economy, the government owns and controls the means of production, sets prices, determines what goods and services should be produced, and decides how resources should be allocated.
Now, let's analyze each statement:
1. Individuals make most economic choices: This statement does not describe a command economy because in such an economy, the government, not individuals, makes the majority of economic decisions.
2. Market forces decide most economic questions: This statement describes a market economy or a mixed economy rather than a command economy. In a market economy, economic decisions are largely determined by supply and demand in the market, with minimal interference from the government.
3. The government controls most economic activity: This statement accurately describes a command economy. In a command economy, the government has significant control and authority over economic activities.
4. Businesses determine most economic outcomes: This statement does not fit a command economy. While businesses exist in a command economy, their decision-making power and influence are limited compared to the government's control over economic outcomes.
Therefore, the statement that best describes a command economy is "The government controls most economic activity."