Question

Read the description of an imaginary country’s economic system. In this country, the government tells an appliance factory that it must produce a minimum of one thousand refrigerators. People are assigned jobs at the factory based on their abilities, and the government determines how much they will be paid. The government decides how much a new refrigerator will cost. Which statement explains why this is a description of a socialist country? Workers are paid based on seniority. The government is making all the economic decisions. The factory is owned by individuals. The law of supply and demand determines price.

Answer 1

The government is making all economic decisions

Answer 2

The answer is B.   The government, in the description of the imaginary country's economic system, tells how many refrigerators must be produced, decides the people's wages and the costs of the products. This is a picture of socialism, a system contrary to Capitalism, that uses a central planning of the economy, with the belief of trying to reach equality and economic security.