Question

In Nerumbia, all businesses are owned by the state. The Nerumbian government plans production, fixes commodity price, and also gives directions on investments to ensure they benefit the nation as a whole and not only a few individuals. Nerumbia has adopted a _____ economy.

a. capitalist

b. command

c. traditional

d. mixed

e. market

Answer 1

Answer: Command

Explanation: A command also known as planned economy is one in which all economic activities are carried out using economic policies laid down by the state. In such economy, government influence and determine the type of goods to be produced, method of production, The price of goods produced, The target market and also oversee the proceeds or income generated. The command system is mainly found in communist economy like North Korea. Command systems is aimed at achieving even or fair distribution of resources among the populates rather than being concentrated in the hands of private investors.