Read each passage carefully and identify type of economic system.State planners in Country A met to decide what the country should focus on producing. After much deliberation, they decided it would be in the countrys best interest to use their limited resources to produce automobiles instead of other consumer goods, such as electronics or textiles. The state planners passed their decision down to factories, and allocated to them raw materials, workers, and other resources needed to produce automobiles. Factories were then told how much they should produce with these resources and who the final products should be shipped to.

ECONOMIC SYSTEMS

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Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]

Read each passage carefully and identify type of economic system.State planners in Country A met to decide what the country should focus on producing. After much deliberation, they decided it would be in the country’s best interest to use their limited resources to produce automobiles instead of other consumer goods, such as electronics or textiles. The state planners passed their decision down to factories, and allocated to them raw materials, workers, and other resources needed to produce automobiles. Factories were then told how much they should produce with these resources and who the final products should be shipped to.

A	Command Economy
B	Market Economy
C	Traditional Economy
D	Mixed Economy

Explanation:

Detailed explanation-1: -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.

Detailed explanation-2: -What information would one use to determine the type of economic system that a country has? The information needed would be the breakdown on who owns the businesses in the country and how much control the government has upon business regulation, taxes, etc.

Detailed explanation-3: -Market economy ("hands off” systems, such as laissez-faire capitalism) Mixed economy (a hybrid that blends some aspects of both market and planned economies) Planned economy ("hands on” systems, such as state socialism, also known as “command economy” when referring to the Soviet model)

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.

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ECONOMICS (CBSE/UGC NET)

ECONOMICS

ECONOMIC SYSTEMS