7
QuizMultiple Choice

Comparing Economic Systems — Quiz

Question 7 • MASTER COURSE United States History

What is one way that a command economy differs from a market economy?

Answer
A
A command economy discourages government regulations.
B
A command economy discourages entrepreneurship.
C
A command economy does not include labor as a factor of production.
D
A command economy does not include capital as a factor of production.

Explanation

In a command economy, the government makes many decisions about what to produce and how resources are used. This leaves less room for private individuals to start businesses and compete, so entrepreneurship is discouraged compared with a market economy. Both systems include labor and capital as factors of production, and command economies generally involve substantial government direction rather than discouraging regulation.

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