How does a command economy handle inflation?

Economics Command Economy Questions



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How does a command economy handle inflation?

In a command economy, the government has control over the allocation of resources and sets prices and production levels. To handle inflation, the government can implement various measures such as price controls, rationing, and direct intervention in the market. They may also regulate wages and limit the amount of money in circulation. Additionally, the government can control imports and exports to manage inflationary pressures. Overall, in a command economy, the government takes direct action to control inflation and stabilize the economy.