Question

The economic system of Country X is heavily controlled by a powerful, centralized government. The government sets a five-year plan, fixes prices and quotas for raw materials, and manages the demand for goods. However, there are wide spread shortages of commodities. This country’s economic system can best described as —

Answer 1

Answer:

The economic system in question is the command economic system.

Explanation:

There are multiple different types of economic systems across the world, and of them is the command economic system. This economic system is typical for communist societies. It has reached its peak in popularity during the second half of the 20th century, but since the 1990's it has experienced a sharp decline and is now practiced in much fewer countries.

The command economy is an economic system that is fully controlled by the government. The government owns all of the resources and facilities. It is making plans for how much, what, when, and at what price goods will be produced. People have very limited choices and often lack certain goods that are very important.