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JAMB Economics 1978 Question 43

Question 43

Economic Systems

Which of the following activities of Government precludes the existence of a market economy?

  1. A.The imposition of taxes
  2. B.the control of the location of industry
  3. C.The central planning of all production
  4. D.The fixing of maximum prices for all necessities
  5. E.The establishment of laws requiring the registration of business firms
Show the answer and explanation

Answer: C (The central planning of all production)

Explanation

If the state plans all production, prices and markets no longer decide what is produced, so a market economy cannot exist.