5511 Fundamental Subjects Exams — 5566 Praxis Test
1. In a command economy, production is determined by ____.
Answer: A
Production in a command economy is determined by the central government.
In a command economy, the central government plays a crucial role in determining production levels, types of goods, and services. This centralized decision-making process contrasts with market economies, where production is driven by consumer demand.
A) central government
This option is correct because, in a command economy, the central government makes all the significant decisions regarding production. It allocates resources and dictates what goods and services should be produced, ultimately controlling the economy's direction.
B) consumers
This option is incorrect as consumers do not drive production decisions in a command economy. Instead, their preferences and demands are secondary to the directives issued by the government, which prioritizes meeting predetermined economic goals.
C) foreign manufacturers
This option is also incorrect. Foreign manufacturers do not dictate production in a command economy since the economy is largely self-contained and controlled by the government. The influence of foreign manufacturers is minimal compared to domestic governmental control.
D) retailers
This option is incorrect because retailers operate within the economy but do not have the authority to determine production. In a command economy, retailers follow the government's guidelines and regulations regarding what products they can sell and in what quantities.
Conclusion
The central government is the definitive authority in a command economy, leading to the correct choice being option A. Other options fail to recognize the lack of consumer, foreign, or retailer influence on production decisions, underscoring the unique characteristics of this economic system.