ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Real-World Examples Many countries in Western Europe are considered mixed economies because the government offers generous welfare programs and tight regulations on business activity. The United States, for example, has many social programs to benefit the poor, as well as several government-owned enterprises.

Detailed explanation-2: -In its purest form, a command economy answers the three economic questions by making allocation decisions centrally by the government.

Detailed explanation-3: -Economists address these three questions: (1) What goods and services should be produced to meet consumer needs? (2) How should they be produced, and who should produce them? (3) Who should receive goods and services? The answers to these questions depend on a country’s economic system.

Detailed explanation-4: -Command economy relies on government officials to answer the three basic economic questions. Officials called – central planners/ decide on what will be produced and made. Individuals have little or no say in economic choices. Command economies don’t exist.