Question

The role played by price mechanism in a free-enterprise economy is taken up by the ___________ in a socialist economy.

• A. state governments
• B. central bank
• C. fiscal regulatory authority
• D. central planning authority

Answer 1

Answer: (D)

central planning authority

In a socialist economy, the price mechanism i.e. price affects the demand and supply of the commodities is directed by a centrally based planning authority that controls the price mechanism to certain limits and regulates it to protect civilians from fraudulent practices.