Which of the following is true about the three broad types of economic

QUESTION

Which of the following is true about the three broad types of economic systems?

A. For a pure market economy to function efficiently product supply must be restricted.

B. In a command economy, state-owned enterprises have little incentive to control costs and be efficient.

C. The sole role of government in a command economy is to encourage vigorous free and fair competition between private producers.

D. Mixed economies were once uncommon throughout much of the world, although they are becoming more popular now.

E. Production in command economies is determined by the interaction of supply and demand and signaled to producers through the price system.

ANSWER

B
In a command economy, state-owned enterprises have little incentive to control costs and be efficient, because they cannot go out of business.