11
QuizMultiple Choice

4.2 Comparing Economic Systems

Question 11 • FL-2100310-United States History A

How are prices determined differently in a free-market economy versus a command economy?

Answer
A
In a command economy, consumers control prices, while in a free-market economy, the government controls prices.
B
In a command economy, manufacturers control prices, while in a free-market economy, consumers control prices.
C
In a command economy, the government controls prices, while in a free-market economy, the market controls prices.
D
In a command economy, the market controls prices, while in a free-market economy, manufacturers control prices.

Explanation

In a command economy, the government makes key economic decisions, including setting or controlling prices. In a free-market economy, prices are mainly determined by supply and demand as buyers and sellers interact in the market. Therefore, choice C is correct: the government controls prices in a command economy, while the market controls prices in a free-market economy.

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