Economics Command Economy Questions
In a command economy, the role of the banking system is primarily to serve as a tool for the government to control and allocate financial resources. The banking system acts as a central authority that manages and directs the flow of funds within the economy. It is responsible for implementing the government's economic plans and policies by providing loans, credit, and financial services to state-owned enterprises and other entities designated by the government. The banking system also plays a crucial role in mobilizing savings, facilitating transactions, and maintaining stability in the financial sector.