In a command economy, how are the prices of goods and services determined?
Responses
A business ownersbusiness owners
B the central governmentthe central government
C market forces of supply and demandmarket forces of supply and demand
D independent agencies and independent regulators
B the central government
In a command economy, the prices of goods and services are determined by the central government (option B). In this type of economic system, the government sets the prices based on various factors such as production costs, availability of resources, and social or political objectives. The government controls the means of production and distribution, making all decisions regarding prices and allocation of resources.
In a command economy, the prices of goods and services are determined by the central government. The government sets the prices based on factors such as production costs, desired outcomes, and goals of the economy. The government also controls the distribution of these goods and services.
To determine the answer, you can first understand the characteristics of a command economy. In a command economy, the government has significant control over the means of production and makes decisions on resource allocation, production levels, and price setting. This stands in contrast to a market economy, where prices are determined by market forces of supply and demand.
By understanding the basic principles and features of different economic systems, you can conclude that the correct answer is option B - the central government.