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What are two reasons why a centrally planned economy tend to be less efficient than a market base economy
Harris de guzman ramos
Centrally planned economies can only be successful if they are incredibly small. Imagine A single group in America trying to control all the prices in the countless markets - it would simply not be possible. Therefore, most centrally planned economies eventually turn into some sort of free market economy. When prices are determined by the give and take of supply and demand, they are much easier to maintain.
jgjjeajojeio
jgjjeajojeio
What are two reasons why a centrally planned economy tend to be less efficient than a market base economy
Harris de guzman ramos
Centrally planned economies can only be successful if they are incredibly small. Imagine A single group in America trying to control all the prices in the countless markets - it would simply not be possible. Therefore, most centrally planned economies eventually turn into some sort of free market economy. When prices are determined by the give and take of supply and demand, they are much easier to maintain.
The government places much emphasis on the production of consumer products.
North Korea is the most centrally planned economy in the world. Most others allow for *some* degree of private trade. Some other less centrally planned economies are: - China - Russia - Cuba
The government places much emphasis on the production of consumer products.
This is because centrally planned economy can never reach the same level of efficiency that free market economies create. Although centrally planned economy does work in the short run (So Viet Union); in the long run, it creates huge inefficiency and thus harm not only the economy but also the people in the country. Hence, by moving towards free market they are able to gain more economic growth and possibly economic development.
The type of government determines how a government becomes centrally planned.
In a traditional economy the economic decisions are largely based on custom. In all centrally planned economies the government makes all important economic decisions.Ê
No. Since its creation in 1946, the Italian Republic has never had a centrally planned economy.