Question

 In a centrally planned economy, all decisions are taken with a view to
maximizing profit. *

true

false

​

Answer 1

Centrally planned economy decisions are not taken to maximize profits

Explanation:

• An economic system in which a central authority, such as a government, makes economic decisions is called a centrally planned economy.
• The central authority set prices for goods, determine how many items are produced, and make labor and resource decisions. Central authorities can better meet the social and national objectives of this system.
• Here prices are controlled by the bureaucrats.
• Hence, Centrally planned economy decisions are not taken to maximize profits. Instead, it is keeping in mind all the class of society.