Question

Which of the following statements best characterizes a basic difference between market economies and centrally-planned economies? a. Society relies more upon prices to allocate resources when the economy is centrally-planned than when it is market-based. b. The self-interest of households is reflected more fully in the outcome of a centrally-planned economy than in the outcome of a market economy. c. Government plays a larger role in the economic affairs of a market economy than in the economic affairs of a centrally-planned economy. d. None of the above are correct.

Answer 1

Answer:

d. None of the above are correct.

Explanation:

In a centrally planned environment, the government make decisions on production.

In a market economy, market forces make production decisions.

Society relies more upon prices to allocate resources when the economy is centrally planned than a market economy.

The self-interest of households is reflected more fully in the outcome of a market planned economy than in the outcome of a centrally planned economy

Government plays a larger role in the economic affairs of a centrally planned economy than in the economic affairs of a market planned economy.

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