In a centrally planned economy, the government makes nearly all economy-related decisions including who produces what and the prices of products, labor, and capital.

Question

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In a centrally planned economy, the government controls and makes decisions on production, pricing, and distribution of goods and services, as well as the allocation of resources including labor and capital. This is in contrast to a market economy where these decisions are largely driven by market forces and consumer demand.

In a Centrally Planned Economy, the Government Makes Nearly All