Which of the following statements best describes the role played by prices in a command economy such as the former Soviet Union?
A) Prices were used to allocate resources.
B) Prices played the same role as in a market economy.
C) Prices were used to ration final goods and services but not to allocate resources.
D) None of the above statements is descriptive.

Question

Quizplus · Accepted Answer

In a command economy like the former Soviet Union, prices were used to ration final goods and services but not to allocate resources. The government set production targets and allocated resources accordingly, with little regard for market demand or supply. Prices were used more as a tool to control distribution and prevent shortages, rather than to guide production decisions as in a market economy.

Which of the Following Statements Best Describes the Role Played