Final answer:
A command economy is one wherein the government makes most economic decisions. It stands in contrast to a market economy where private individuals and firms make these decisions. In a mixed economy, there's a combination of both. Option a is the correct answer.
Step-by-step explanation:
In an economic system, the entities that determine the answers to the fundamental questions of what to produce, how to produce it, and for whom production is intended can characterize the type of economy in question. The type of economy where the government decides all or most economic questions is known as a command economy.
This is in contrast to a market economy, where these decisions are made primarily by private individuals and firms, and a mixed economy, which combines elements of both command and market approaches, with some decisions made by the government and others by private sectors.
The United States is an example of a mixed economy, leaning towards the market-oriented end with more private sector decision-making. However, some countries in Europe and Latin America, despite being market-oriented, have greater government involvement. Countries like China and Russia have economies that, while moving towards a market-based approach over recent decades, still retain strong command economy characteristics.
In summary, the command economy is the one in which the government is the primary decision-maker regarding economic questions, making option 1) the correct answer to the student's question.