ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a true communist economy, the community makes decisions. In most communist countries, the government makes those decisions on their behalf. This system is called a command economy. The leaders create a plan that outlines their choices, and it’s executed with laws, regulations, and directives.

Detailed explanation-2: -The command economy is a component of a communist political system, while a free market system exists in capitalist societies.

Detailed explanation-3: -A command economy, also known as a planned economy, is one in which the central government plans, organizes, and controls all economic activities to maximize social welfare. Command economies, as opposed to free-market economies, do not allow market forces like supply and demand to determine production or prices.

Detailed explanation-4: -In communist or socialist nations, such as modern-day North Korea, this type of economic system is a significant element. The former Soviet Union, Cuba, and North Korea all have command economies.

Detailed explanation-5: -It was Karl Marx, in the Communist manifesto who argued for ‘common ownership of the means of production. ‘ A command economy works in contrast to a free market economy.