Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Micro Economics: Introduction

Question:

Which of the following is the closest example of a centrally planned economy?

Options:

China

India

US

Japan

Correct Answer:

China

Explanation:

The closest example of a centrally planned economy among the options provided is: China

In a centrally planned economy, the government or the central authority plans all the important activities in the economy. All the important decisions regarding production, exchange and consumption of goods and services are made by the government. 

China has a history of centrally planned economic systems, where the government plays a dominant role in allocating resources, setting production targets, and controlling key sectors of the economy. While China has undergone significant economic reforms and transitioned towards a more market-oriented system, it still has a strong element of central planning in its economy. 

India, US, and Japan: These countries are considered mixed economies. They have a market economy where private businesses play a major role, but also have government intervention in some areas like regulation, social welfare programs, and public infrastructure. While the government might influence economic activity, it doesn't have the same level of centralized control over production and resource allocation as in China.