The term that best describes an economy in which the government determines the production and distribution of goods is a:
planned economy
In a planned economy the investment and allocation of goods is determined by a production plan. This economic system can be centralize or decentralized. As opposed to a command economy that is characterized by a hierarchical administration. Also, a planned economy differs from a market economy in that companies do not have the liberty to decide on production, investment, cost and distribution. A free economy is characterized by having no government intervention. While a mixed economy lays has some government intervention but firms still have many liberties and is partially regulated by the market.
