Final answer:
In a centrally planned economy, the government makes all important economic decisions, controlling production, prices, and wages, and often provides necessities like healthcare and education for free. The true statement about the government's role in such an economy is that it makes all important economic decisions.
Step-by-step explanation:
In a centrally planned economy, the government is in control of all the important economic decisions. Unlike market economies where individuals and businesses determine the production and distribution of goods, a centrally planned economy relies on government officials or central planners who decide what to produce, how to produce it, and who will receive the products once they have been produced. Cuba and North Korea are examples of countries with command economies where the government plays a pivotal role in the economy.
Specifically, in a centrally planned economy, it is the government that decides what goods and services will be produced and at what prices, which methods of production to use, and the wage levels for workers. Necessities such as healthcare and education are often provided for free by the government. Consequently, the correct answer to the question of what is true of the government in a centrally planned economy is D) it makes all important economic decisions.