How Does a "Command Economy" Compare to a "Market Economy

question 81

Multiple Choice

How does a "command economy" compare to a "market economy"?

• A) Production and distribution decisions are made by central planners in a command economy, but not in a market economy.
• B) There is scarcity in command economies, but not in market economies.
• C) Command economies are less prone to inflation than are market economies.
• D) A command economy is more efficient than a market economy because decision making is centralized.

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Definitions:

Intra-Entity Debt Transactions

Financial obligations or loans between entities within the same corporate group, not necessarily evidenced in consolidated financial statements until settled externally.

Amortization Process

The systematic reduction of a loan or the spreading out of capital expenses over a fixed period of time.

Investment Account

An account holding securities, cash, and other assets managed by an investment dealer or manager for the benefit of the investor.

Variable Interests

Interests in an entity that change based on changes in the entity's net asset value, income, or cash flows.