Final answer:
A command economy is one in which the government controls key economic decisions, including what is produced, the methods of production, pricing, and worker wages. Essentials like healthcare and education are often provided for free. Cuba and North Korea are contemporary examples of such economies.
Step-by-step explanation:
A command economy is a system where the government makes all key economic decisions. Unlike a market economy where supply and demand determine the production of goods and services, in a command economy, the government decides what to produce, how much to produce, and at what prices to sell the products. The government also sets the wages for workers and often provides essential services like healthcare and education at no direct cost to the citizens.
Within a command economy, individual choice is limited, and the government typically controls the factors of production. This can sometimes enable a concentrated effort on specific governmental goals, whether they relate to infrastructure, national defense, or public services. Examples of countries that currently have or maintained command economies include Cuba and North Korea.
Historically, command economies have been associated with communist governance, where economic activity is aligned with the state's goals and objectives. However, many modern economies operate with mixed systems that incorporate elements of both command and market principles.