Question

Which statements BEST describes a command economy? Resources are owned by the government. Capitalism is a type of command economy. Little changes from generation to generation. The economy is based on fishing and agriculture.

Answer 1

The correct statements are:

- Resources are owned by the government;

The command economies are typical for the socialist/communist countries. In this type of economy, the government controls everything, the resources of the country, the production facilities, trade is organized by the government officials, the planning for production of when, how much, and how, is done by government officials... Unfortunately for the people living in this types of countries, this type of economy very often led to big problems, especially in the food supply department.

- Little changes from generation to generation;

This can be seen as trait of both command and traditional economy. In the command economy there are little to no changes as the time passes, so from one generation to another, the changes will either be lacking, or they will be so minor that they will be unnoticeable.