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A) United States
B) Germany
C) North Korea
D) Canada
Correct Answer: C)
North Korea
Explanation
Among the given options, only North Korea has a command economy. In a command economy, the government has complete control over the economic factors, including production, quantity, and costs. North Korea has a centralised command economy where the officials decide what to produce, how much to produce a good, and at what price it should be marked.
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The U.S. operates under a market economy, where the supply and demand decide the major decisions regarding the cost and production of goods. The government does play a regulatory role, but doesn't control it all.
Germany has a mixed economy—it combines free-market principles with social welfare policies. While businesses are largely private, the government does intervene in areas like healthcare and infrastructure.
Canada also follows a mixed-market system, balancing free enterprise with government involvement in sectors like healthcare, public transport, and education.
All resources, like land, factories, and businesses, are owned by the government. Private businesses are either limited or almost non-existent.
Goods and services are all chosen by the government. This means that there is barely any choice among the consumers with every major decisions being undertaken by the government.
Prices are set by the government, not by market forces. This helps maintain uniformity but may ignore supply-demand realities.
Since all the businesses are owned by the government, there is no one to compete with in the market. So the people will get the same goods at similar prices. However, this also impacts the overall quality of the goods and their variety.
Most citizens are assigned jobs by the state, often ensuring full employment regardless of actual productivity.
A: No, China isn’t a command economy. Until one point, it used to be, but now it follows a normal market economy. However, there are still some strict regulations by the government that make it a unique blend of state-controlled capitalism.
A: There are various factors that would decide whether a command economy can work in modern times. However generally most nations finds great flexibility by avoiding command economy. So it wouldnt rarely ever work out in modern times.
A: They can lead to economic stagnation, a lack of technological advancement, and social unrest due to a lack of choice and freedom.
