A characteristic of centrally planned economies is that
A)the price is relatively unimportant in allocating resources.
B)profits are the main measure of success of a firm.
C)entrepreneurship is quite prevalent and highly rewarded.
D)there are many incentives for innovation and hard work.

Question

Quizplus · Accepted Answer

In centrally planned economies, the government, rather than market forces, primarily determines what goods should be produced, how much should be produced, and the price at which the goods will be offered for sale. This means that the price mechanism, which in market economies serves to allocate resources based on supply and demand, plays a much less significant role in centrally planned economies.

A Characteristic of Centrally Planned Economies Is That