ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The command economy, also known as a planned economy, requires that a nation’s central government own and control the means of production.

Detailed explanation-2: -In a command economy, the government owns the factors of production; all decisions about land, labor, and capital are made by the state.

Detailed explanation-3: -Government Controls Production in Command Economy In a command economy, the government (or some other central authority) controls and steers major aspects of economic production. The government decides the means of production and owns the industries that produce goods and services for the public.

Detailed explanation-4: -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-5: -Socialism and the Command Economy In socialist countries, the state centralizes and controls economic decisions. A dictator or central planning committee decides what goods will be made, who will make it, how much to make, and who will buy it. The state does not control labor.