Florida Teacher Certification Examinations (FTCE) Social Science Practice Test

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Prepare for the FTCE Social Science Exam. Access study materials with multiple choice questions, hints, and detailed explanations. Achieve success on your certification test!

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Which economic system is characterized by government control and direction?

Capitalism
Mixed Economy
Planned Economy
Free Market

The correct answer is: Planned Economy

A planned economy is characterized by significant government control and direction over economic activities. In this system, the government decides what goods and services are produced, how much is produced, and at what prices they are sold. This contrasts with economic systems like capitalism and free markets, where individual choice and market forces predominantly drive the economy. In a planned economy, the government takes an active role in regulating resources and directing economic output to meet specific goals, such as the equitable distribution of resources or advancements in industrial capacity. This approach aims to eliminate the inefficiencies that may arise from unregulated market competition. While mixed economies may incorporate elements of both government control and market mechanisms, a planned economy distinctly emphasizes government planning and control as a primary means of economic management. Capitalism, on the other hand, focuses on private ownership and free market principles without extensive government intervention.