What was the economic system of the GDR called?

EDITORIAL LEARNING AID

Why is this answer correct?

In the GDR, production and prices were planned centrally by state authorities, which is why the system is called a planned economy. Market economy, capitalism and the interplay of supply and demand, by contrast, characterise the social market economy of the Federal Republic.

GDR: the state planned the economy, companies were publicly owned.

This translation and explanation are editorial learning aids. The official German wording and answer key govern the examination.