ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Expert-Verified Answer. In theory, command economy is the type of economic system should not experience market fluctuations. The correct option is C. In a command economy, the government has complete authority over the economy it oversees.

Detailed explanation-2: -A market economic system or capitalist economy involves very less government interference and incorporates the principles of the free market. There is a scant exercise of control over resources. Market forces regulate demand and supply.

Detailed explanation-3: -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-4: -Socialism and communism need a command economy to create a central plan that guides economic decisions. Market economies evolve from traditional economies. Most societies in the modern world have elements of all three types of economies. That makes them mixed economies.

Detailed explanation-5: -Each economy functions based on a unique set of conditions and assumptions. Economic systems can be categorized into four main types: traditional economies, command economies, mixed economies, and market economies.