In a command economy, what is the primary goal of economic decision-making?

• A. Encourage competition among private firms
• B. Allocate resources according to government plans and objectives
• C. Allow prices to be determined by market forces
• D. Maximize individual consumer choice

Answer: (B)

Verified step by step guidance

1. Understand the nature of a command economy: In this type of economic system, the government has significant control over the allocation of resources and production decisions.
2. Recognize that in a command economy, economic decision-making is centralized rather than decentralized through market forces.
3. Identify that the primary goal is to allocate resources according to government plans and objectives, rather than allowing prices to be determined by supply and demand.
4. Note that encouraging competition among private firms and maximizing individual consumer choice are characteristics more typical of market economies, not command economies.
5. Conclude that the main focus in a command economy is to follow government directives to meet planned economic goals, which guides all resource allocation and production decisions.