What characterizes a command economy?

A command economy is characterized by the central authority, usually the government, making significant decisions regarding the production and distribution of goods and services. In this economic system, the government determines what to produce, how much to produce, and who receives the products. This central planning is intended to manage resources efficiently and ensure that all members of society are provided for, aligning allocation decisions with national priorities, rather than individual market forces.

In contrast, other options describe different economic systems. Private ownership and the ability to trade freely align more with a market economy, where supply and demand dictate production and pricing. Similarly, the allocation of resources by tradition points to a traditional economy, which relies on customs and historical precedent rather than government directives. Finally, a system where economic decisions are shaped through market interactions represents a market economy, emphasizing consumer choice and competition as the primary drivers of economic activity. Thus, the correct identification of a command economy centers around the central government's role in directing economic activities.