The statement "The government controls the production of goods" is true of North Korea's economy. North Korea operates as a command economy, where the state or the government owns and controls the means of production, distribution, and exchange of goods and services, and plays a dominant role in determining the economy's direction and development. There is no private ownership of farms and factories, and many market economy policies have not been put in place. While North Korea's production of military goods has allowed it to invest heavily in defense, it has resulted in economic hardship for many North Korean citizens.