In practice,the term "centrally planned economy" refers to an economy in which
A)the government makes ALL production and consumption decisions.
B)the mix of market and command principles is heavily weighted towards the latter.
C)all commodities are rationed.
D)the military is in control of the government.
E)economic decisions are made in the geographic centre of the country.

Question

Quizplus · Accepted Answer

A centrally planned economy refers to an economy in which the government has a significant role in controlling and planning economic activities. While option A suggests that the government makes all decisions, this is not entirely true in most centrally planned economies. Option C suggests that all commodities are rationed, which is not always the case. Option D suggests that the military is in control of the government, which is not applicable to all centrally planned economies. Option E is also incorrect as economic decisions are not necessarily made at the geographic centre of a country. Option B is the best choice as it reflects the main characteristic of a centrally planned economy, which is a heavy emphasis on command principles with limited market forces.

In Practice,the Term "Centrally Planned Economy" Refers to an Economy