Which describes a command economy with example?

Which describes a command economy with example?

• A. Command economy relies on supply and demand.
• B. Command economy is government-planned; e.g., old Soviet.
• C. Command economy has free markets with private property.
• D. Command economy is based on barter system only.

Answer: (B)

A command economy is a system where the government plans and directs economic activity—deciding what to produce, how to produce, and for whom. Central planners, not consumers, guide these choices, and prices are set by the state rather than by supply and demand. The example fits because it points to a government-planned economy and references the old Soviet Union, which is a well-known historical instance of this type of system. That helps distinguish it from options that describe markets or barter. In a market economy, decisions come from buyers and sellers through supply and demand, with private property and relatively free markets. A barter-based system relies on direct exchange of goods without money, which is not how a state-planned economy operates.

A command economy is a system where the government plans and directs economic activity—deciding what to produce, how to produce, and for whom. Central planners, not consumers, guide these choices, and prices are set by the state rather than by supply and demand.

The example fits because it points to a government-planned economy and references the old Soviet Union, which is a well-known historical instance of this type of system.

That helps distinguish it from options that describe markets or barter. In a market economy, decisions come from buyers and sellers through supply and demand, with private property and relatively free markets. A barter-based system relies on direct exchange of goods without money, which is not how a state-planned economy operates.