Question

In a socialistic economy the problem of allocation of resources is addressed by ____________.

• A. market forces
• B. administrative price mechanism
• C. mutually by producers and consumers
• D. central bank

Answer 1

Answer: (B)

administrative price mechanism

In a socialistic pattern of economy the problem of allocation of resources is addressed by the administrative price mechanism.

This is because the market forces are not given importance in determining the prices of products. And it is the government who does the planning about these matters. The resources are allocated and distributed by the government to all the sections of society fairly. This is done so that no injustice prevails in the market.