Final answer:
In a command economy, the government determines what goods and services are produced, how they are produced, and who receives them, based on central planning rather than market forces.
Step-by-step explanation:
In a command economy, the government determines the answers to the three central economic questions of What, How, and For Whom to produce. The choices about resource utilization and production are centralized in the hands of the state.
- What is to be produced?: In a command economy, the government decides what goods and services should be produced based on its assessment of the needs and priorities of the country, rather than on market demand or consumer preference.
- How are goods and services going to be produced?: The government directs the methods and processes of production, often planning the allocation of resources, the types of technology to be used, and setting production targets for different sectors of the economy.
- For whom are goods and services going to be produced?: The government also decides the distribution of the output among the population. This decision is usually based on political and social objectives rather than market forces such as supply and demand or purchasing power.
Thus, a command economy seeks to manage the economy through centralized governmental control over all aspects of production and distribution, often striving for social goals over individual consumer choices.