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In a command or planned economy, the government, not the market, regulates the factors of production and economic activities considered essential to the function of the economy.  Economic decisions including what goods and services to produce (supply), how resources are allocated and regulated and how profits are distributed are made and implemented by the government.

 

How is the U.S. economy different from a command economy? Can the U.S. economy be called a true free market economy? Explain your answer by discussing the ways in which the federal government interacts with and regulates the U.S. economy in the context of both a command and free market economy.

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