ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The command economy, also known as a planned economy, requires that a nation’s central government own and control the means of production.

Detailed explanation-2: -In a command economy, the government owns the factors of production; all decisions about land, labor, and capital are made by the state.

Detailed explanation-3: -In command economies, the government controls the factors of production and answers the 3 economic questions of what, how and for whom to produce for all of society. Command economies often associated with socialism, communism and authoritarianism.

Detailed explanation-4: -Under the command economy, the government exercises the most control for the factors of production such as capital, labor, entrepreneurship and land.

Detailed explanation-5: -In most communist countries, the government makes those decisions on their behalf. This system is called a command economy.