Under which economic system does the government dictate both what and how goods are produced?

In a command economy, the government exerts significant control over the production and distribution of goods and services. This system centralizes decision-making, allowing the government to dictate not only what goods are produced but also how they are produced. This control typically aims to achieve specific economic and social objectives, such as equality or direct resource allocation for the benefit of the community as a whole.

In contrast, traditional economies rely on customs and practices to determine production, while market economies depend on individual choices and market forces to guide what is produced and how. Mixed economies incorporate elements of both command and market systems, allowing for some degree of government intervention alongside market mechanisms, but they do not feature the same level of government direction in production as a command economy. Thus, the defining characteristic of a command economy is the governmental authority in decision-making regarding the production process and economic outcomes.