In Practice, the Term "Centrally Planned Economy" Refers to an Economy

question 51

Multiple Choice

In practice, the term "centrally planned economy" refers to an economy in which

• A)the military is in control of the government.
• B)economic decisions are made in the geographic centre of the country.
• C)all commodities are rationed.
• D)the government makes all production and consumption decisions.
• E)the mix of market and command principles is heavily weighted towards the latter.

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Definitions:

Price Level

Refers to the average of current prices across the entire spectrum of goods and services produced in the economy.

Production

The process of combining various material inputs and immaterial inputs (plans, knowledge) to make something for consumption.

Real GDP

Gross Domestic Product adjusted for inflation, providing a more accurate measure of an economy's size and growth rate over time.

Real GDP

The measure of a country's economic output adjusted for price changes (inflation or deflation), reflecting the true value of goods and services produced.