Social Studies Praxis Practice Test

Which of the following is a characteristic of socialism as an economic system?

1. The production and distribution of the nation's output are determined by central government planners.

2. The decisions about production and distribution are made by individual households and firms.

3. Central planners impose production rules and regulations on privately owned businesses.

4. Central planners impose taxes on corporate profits and rents.

The correct answer is: The production and distribution of the nation's output are determined by central government planners.

In socialism, a defining characteristic is that the production and distribution of goods and services are primarily determined by central government planners. This approach aims to achieve greater equity and access to resources across the society by reducing the influence of market forces and private ownership. In socialist systems, the government often takes a significant role in economic decision-making, which contrasts with capitalist systems where individual households and firms largely drive market dynamics. In socialism, the central planners assess the needs of the population and allocate resources accordingly, with the goal of addressing issues like inequality and providing for public welfare. This system emphasizes collective ownership or control over various sectors of the economy, as opposed to letting market competition dictate outcomes. The nature of central planning reflects the fundamental ideal of socialism to prioritize social welfare rather than individual profit motives.