The correct answer is D) the government encourages competition in the market place.
The statement about a Communist economy that IS NOT TRUE is "the government encourages competition in the market place."
Communist countries are not democratic. The process of production is solely dictated by the government. There is no free market, no competition between companies. People do not have the opportunity to decide where to buy. In a Communist country, is the government that decides what to produce, the amount of production, and what is not to be produced. Workers had no rights. They are "employees" of the government and the wages are determined by the government officials. There are no productivity incentives, as it is the case in free market economies. So workers had no extra motivation to produce more or work better. They just have to do what the government say.
