Question

In a socialist economy, all decisions regarding production and distribution are taken by :
a) Market forces
b) Central planning authority
c) Customs and traditions
d) Private sector.

Answer 1

b) Central Planning Authority.

The most important distinction between Capitalism and Socialism lies in the fact that, in a Capitalistic society, private ownership and market forces contribute to the distribution and production of goods.

However, in a socialist economy, there always exists the intervention of the government or the central planning authority .

This is because, if there is one central authority controlling the production and distribution of goods, then the distribution will be more humanitarian and egalitarian in nature.