What are some differences between a command economy and a market economy?
What will be an ideal response?
ANS:
Under a market economy, the decision of what to produce, how much to produce, and who gets what are made by free market forces and competition. Prices and wages are also determined by market forces. In a command economy, all these decisions, including prices, are decided by the state.
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What is an overvalued exchange rate? What factors may cause a country's currency to become overvalued?
What will be an ideal response?
To adjust from Net National Product to Gross National Product:
a) Add depreciation b) Deduct indirect taxes c) Add subsidies d) Add inflation
The existence of the “underground economy” causes measured GDP to overestimate actual output.
Answer the following statement true (T) or false (F)
The theory of resource pricing is sometimes referred to by economists as the theory of income distribution. Why?
What will be an ideal response?