ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Resources in a market economy include land, labor, and capital. In a command economy, a central government or single ruler decides how many goods should be produced and services provided, and sets their prices. Most countries, including the U.S., have economies with elements of both market and command economies.

Detailed explanation-2: -In a command economy, governments own the factors of production and set prices and production schedules. In a market economy, prices are set by supply and demand. Most nations operate largely as a command or market economy but all include aspects of the other.

Detailed explanation-3: -Private property, freedom, self-interest, competition, minimum government intervention are the characteristics of a market economy.

Detailed explanation-4: -Money is used to facilitate exchanges in market economies, but not command economies. The government makes all decisions about resource allocation in a market economy. Resources are owned by private individuals, rather than by the government, in a market economy.

Detailed explanation-5: -The major difference between a command economy and a market economy is that a command economy the government controls what is produced and how it will be shared and in a market economy people have more freedom and can make their own decisions.