ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What is a Command Economy? Command economy is a system where the government decides goods production, process, quantity, and price in a country. In this system, the government also manages income and investments.

Detailed explanation-2: -In a command economy, the central government dictates the level of production of goods and controls their distribution and prices. Proponents of command economies argue government control rather than private enterprise can ensure the fair distribution of goods and services.

Detailed explanation-3: -In a command economy, the government determines what is produced, how it is produced, and how it is distributed. Private enterprise does not exist in a command economy. The government employs all workers and unilaterally determines their wages and job duties and product pricing.

Detailed explanation-4: -If production, allocation, and ownership are 100% controlled by government, then we call such an economic system as Socialism.

Detailed explanation-5: -In a command economy, the government owns the factors of production; all decisions about land, labor, and capital are made by the state.