Read the text and answer the question.

Question

Read the text and answer the question.

In Country X, the factors of production are all publicly owned and controlled by the government. The basic economic questions of what to produce, how to do so, and how to distribute goods are determined by Country X's government and not by market forces. Because they are set by central planners, prices do not signal to producers whether to increase or decrease production.
What kind of economy does Country X have?
A.
The government's role in setting the prices of goods shows that Country X has a market economy.

B.
The government's ownership of the factors of production shows that Country X has a market economy.

C.
The government's encouragement of entrepreneurship shows that Country X has a command economy.

D.
The government's control of the factors of production shows that Country X has a command economy.

Answer 1

D. The government's control of the factors of production shows that Country X has a command economy.

Answer 2

D.

The government's control of the factors of production shows that Country X has a command economy.

Answer 3

The correct answer is D. The text states that in Country X, all factors of production are publicly owned and controlled by the government. This indicates that the government has control over the production process, which corresponds to a command economy. In a command economy, the government sets the basic economic questions and determines the production and distribution of goods, rather than market forces.