Question

Which situation best illustrates how production decisions are made in a command economy?

Answer 1

C, a village elder teachers young farmers which crops to grow in different seasons.

Answer 2

Answer: D: A government panel orders factories to make more fuel-efficient cars.

Explanation:

- A command economy occurs when production, investment, prices, and incomes are determined centrally by a government

- basically, every factor of the economy is controlled by a central authority which is most commonly the government

- command economics include socialism and communism

- therefore, the government regulation described in answer D decsribes a command economy

- the answer is d

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