ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In its purest form, a market economy answers the three economic questions by allocating resources and goods through markets, where prices are generated. In its purest form, a command economy answers the three economic questions by making allocation decisions centrally by the government.

Detailed explanation-2: -In a command economy, what goods and services are produced, how they are produced, and for whom they are produced are all questions answered by government planning. The government makes economic decisions for the good of society.

Detailed explanation-3: -In a pure command economy, the basic economic questions are answered by the government, which owns the productive resources and handles distribution of goods and services.

Detailed explanation-4: -The government answers the three key economic questions. Karl Marx advocated a centrally planned economy.

Detailed explanation-5: -command economy, economic system in which the means of production are publicly owned and economic activity is controlled by a central authority that assigns quantitative production goals and allots raw materials to productive enterprises.