What term describes an economic system where the government owns and controls all factors of production?

What term describes an economic system where the government owns and controls all factors of production?

• A. Mixed market
• B. Free market
• C. Command economic system
• D. Traditional economic system

Answer: (C)

A command economic system is one in which the government has full ownership and control over all factors of production, including resources, businesses, and labor. In such a system, economic decisions regarding what to produce, how to produce, and for whom to produce are made centrally by the government, rather than through market forces or individual choices. This system contrasts with a free market economy, where decisions are driven by individual consumers and firms based on supply and demand. In a mixed market economy, elements of both government intervention and free market principles exist. A traditional economic system, on the other hand, is based on historical precedent and involves customs and traditions influencing production and distribution rather than government control. The essence of a command economic system lies in its centralized planning and decision-making, which is aimed at achieving certain societal or political goals, often prioritizing equality over efficiency. This characteristic makes it distinct from other economic systems.

A command economic system is one in which the government has full ownership and control over all factors of production, including resources, businesses, and labor. In such a system, economic decisions regarding what to produce, how to produce, and for whom to produce are made centrally by the government, rather than through market forces or individual choices.

This system contrasts with a free market economy, where decisions are driven by individual consumers and firms based on supply and demand. In a mixed market economy, elements of both government intervention and free market principles exist. A traditional economic system, on the other hand, is based on historical precedent and involves customs and traditions influencing production and distribution rather than government control.

The essence of a command economic system lies in its centralized planning and decision-making, which is aimed at achieving certain societal or political goals, often prioritizing equality over efficiency. This characteristic makes it distinct from other economic systems.