Centrally Planned Economies

In a command economy, who holds power over the economy?

• The people

• The government 

• Beyonce

• The traditions of your ancesetors 

Based on the passage, East Germany's government planned to transform its economy from: Click the magnifying glass for a better view.

• Traditional to mixed

• Command to traditional

• Market to mixed

• Command to mixed

What is one of the major disadvantages of a centrally planned economy?

• It lacks the capacity to produce factory goods because its resources are scarce. 

• It places individual freedoms above the pursuit of societal goals. 

• It focuses on rewarding innovation instead of guaranteeing jobs and income. 

• It does not allow producers of goods and services to respond to consumer signals. 

In a centrally planned economy, who makes the major economic decisions?

• The government

• Private businesses

• Individual consumers

• International organizations

Which of the following is a characteristic of a centrally planned economy?

• Market-driven pricing

• Government ownership of resources

• High level of competition

• Consumer sovereignty

What is a common criticism of centrally planned economies?

• They promote too much competition

• They lead to unequal wealth distribution

• They often result in inefficient resource allocation

• They focus too much on consumer needs

Which country is historically known for having a centrally planned economy?

• United States

• Sweden

• Soviet Union

• Japan

How do centrally planned economies typically handle innovation?

• Encourage through private incentives

• Rely on government-directed research

• Depend on market competition

• Focus on consumer-driven innovation

What is one advantage often claimed by proponents of centrally planned economies?

• Rapid industrialization

• High levels of consumer choice

• Efficient resource allocation

• Strong individual entrepreneurship

In a centrally planned economy, what role do prices play?

• Signal consumer preferences

• Determine supply and demand

• Set by government planners

• Fluctuate based on market forces