Question

With a communist economy system, which of the following is true?

1) There is complete freedom of trade
2) Consumers can expect a mixed economic reaction
3) There are strong incentives for workers
4) Basic industries such as railroads and utilities are owned by government, while other industries are owned by the private sector
5) None of the above is true

Answer 1

Option 4) is closest to describing a communist economy system, where basic industries are typically owned by the government; however, it mistakenly implies other industries may be privately owned, conflicting with pure communism. In practice, countries may blend communism with aspects of market socialism, allowing some private ownership under strict regulation.

Step-by-step explanation:

When considering a communist economy system, it is important to understand its key characteristics and how they differentiate from other economic systems. In a pure form of communism, which can be referred to as a planned or command economy, the government owns and controls all means of production. It dictates the types and quantities of goods and services to be produced, and it oversees the distribution of these goods, often aiming at achieving a degree of socio-economic equality among citizens. Basic industries such as railroads and utilities are typically owned and operated by the government, rather than being mixed with private sector ownership.

Given this understanding, option 4) on your list is the closest to being correct, as it states that basic industries like railroads and utilities are owned by the government. However, it incorrectly suggests that other industries may be owned by the private sector, which is not in alignment with the principles of a pure communist system. In practice though, many countries that identify as communist have moved towards incorporating certain elements of market socialism, allowing limited private ownership and market forces to influence some aspects of the economy. While there may be incentives for workers and a degree of freedom of trade within this market socialism, these components are typically restricted and subject to significant government regulation and control.

In conclusion, while no option perfectly describes the true nature of a communist economic system, option 4) most closely aligns with the nature of communist economies, with the clarification that in reality, most industries are owned or controlled by the government rather than the private sector.