Statement I: In a centrally planned economy the government sets the prices and decides how much of each good is to be produced.
Statement II: In a market economy,the interaction of buyers and sellers sets prices and determines how much of each good is to be produced.

Question

Quizplus · Accepted Answer

Both statements accurately describe the fundamental differences between a centrally planned economy, where the government makes all decisions regarding production and pricing, and a market economy, where these decisions are made through the interactions of buyers and sellers.

Statement I: in a Centrally Planned Economy the Government Sets