Which statement best describes how a command economy functioned in the Soviet Union ?
Correct answer: D. A central authority determined the type and quantity of goods to be produced
- A. The laws of supply and demand controlled the economy
- B. Trade policies mandated that imports exceed exports
- C. The success of the agricultural sector controlled the price of manufactured goods
- D. A central authority determined the type and quantity of goods to be produced
Explanation
In a command economy, a central planning authority decides what goods will be produced, in what quantities, and often at what prices. Supply and demand do not independently determine production as they do in a market economy.
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