When a country like North Korea is characterized as a command economy, it's because most prices are
A)determined in the market, and they usually lead to market failures.
B)set by the government, which usually leads to inefficiencies.
C)determined in the market, and they result in efficient outcomes.
D)set by the government, and they result in efficient outcomes.
E)determined in the market, and they usually lead to inefficiencies.

Question

Quizplus · Accepted Answer

A command economy is one in which the government controls most aspects of the economy, including setting prices. While this may lead to some level of stability and predictability, it often results in inefficiencies due to the lack of market competition and pricing signals. North Korea is a prime example of a command economy, with the government controlling nearly all aspects of economic activity within its borders.

When a Country Like North Korea Is Characterized as a Command