In a centrally planned economy,
Correct answer: B. government officials set prices
- A. business leaders set production quotas and report them to government, which holds them accountable
- B. government officials set prices
- C. supply and demand are key indicators of prices and production levels
- D. all of these are the case: government officials set prices; business leaders set production quotes and report them to government; and supply and demand are key indicators of prices and production levels
Explanation
In a centrally planned economy, government authorities determine prices and production targets instead of leaving them mainly to market forces. Supply and demand are therefore not the key indicators, making option b the only valid choice.
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