Planned Economy

A Planned Economy or Command Economy is an economy primarily driven by the local government which chooses how much production an industry should perform. Given the myopic views of most governments, planned economies often resulted in production shortfalls and excesses, leading to general frustration of populaces where planned economies existed, such as most Communist countries prior to the 1980s.

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Ireland
Planned Economy

Does Ireland have a market or command economy?

It has a mixed economy that leans towards free market.

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Planned Economy

Who determines the prices in a centrally planned economy?

I don't quite understand your question, isn't the definition of a centrally-planned economy one in which the government plans the economy? I imagine that in most centrally planned economic schemes the government would either determine the prices or set a cap for essential goods.

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Planned Economy

In a command economy what does the government not do?

Allocate resources.

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Capitalism
Planned Economy

How different is a market economy from centrally planned economy?

  • Central Planning: A centrally planned economy relies on a party in power to decide what resources should be allocated to various demands as they see fit.
  • Free Market: A free market economy relies on prices to determine where demand should be filled and to what extent.

Because of these differences, an economy that is centrally planned is usually inefficient in their allocation of resources to each market. They decide beforehand which areas will get resources, restricting the supply and setting a price with no knowledge about the consumer's choice.

A free market is much more adaptable, using price as a communicator, supply, demand and price interact to form equilibriums that satisfy market clearing outcomes. This system is much more efficient in that the people who value the goods most are able to get them. This is the idea, it doesn't always work perfectly.

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Ethiopia
Planned Economy

Does Ethiopia have a command economy?

yes

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Planned Economy

What is a command economy?

the best answer to make it more better to understand is

  • an economic system in which the government controls and regulates production, distribution, prices, etc.

and command economy or planned economy is a noun
A command economy is an economic method where the price and supply of products are set and regulated by the government. The command economy is a key feature of a communist society.
A command economy is when the government owns all the businesses, make all the prices,and tell who gets to work there(under option). For example....

Say Germany is under a command economy by the US. The Us does all their businesses and owns all them,makes all the prices and tells show works there.

But a market economy is when anyone can own the business.

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Planned Economy

What are the advantages and disadvantages of the planned economy?

The advantages are: The welfare of all citizens is the primary goal of the economic system

Wasteful competition is avoided

wages are controlled by the state there is no industrial unrest.( such as strike action)

There is greater emphasis on the quantity of life (health, education, elimination of poverty, moral direction) than on the quantity of production(output) in the country.

Disadvantages: NO freedom of choice for producers or consumers

Lack of incentives for workers result in low morale efficiency. Managers are also not motivated.

The system is too rigid to adjust when changes occur, this can result in shortages.

Advantages: Free health care, education

Disadvantages: Government set prices on goods and sets wages. people get paid even if they don't do there job EX: you could sit at a restaurant for an hour and not get served (poor service and rude employees)

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Planned Economy

How are economic decisions made in a command economy?

In a command economy, the government makes the economic decisions. This means that they control industry (including manufacturing and agriculture), as opposed to being controlled by the markets and the people. The government decides what goods to produce and how to distribute them.

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Planned Economy

Which countries have a pure command economy?

Apparently North Korea has a pure command economy.

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Planned Economy

What are the features of a planned economy?

In such economies, central economic planning by the state or government controls all major sectors of the economy and formulates all decisions about the use of resources and distribution of output.

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Planned Economy

Who controls natural resources in a command economy?

Those that have the resources

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Planned Economy

What are the characteristics of command economy?

collectivism, communism, socialism, planned, centrally planned, public enterprises, wealth equality, government intervene, security, economic stability, cooperation, and society.

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Planned Economy

What is a planned economy?

An economy where a government has the responsibility of allocationg resources.

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Planned Economy

What are the negative effects of turning from a planned economy into a market economy?

In a planned economy, many workers may have been employed in industries that produced more goods or services than were needed. In moving to a market economy, those workers may be displaced and need retraining to find new employment. In some cases, whole industries which produced inferior products or had inefficient cost structures may find that their products are not competitive in a market-based economy, causing massive dislocation of workers.

Corporate management may not be equipped to handle the transition, either. In a planned economy, operational planning is simple, because the production quotas are known in advance. Having little experience in quickly adjusting their operations to meet fluctuating demand, managers may not be prepared to make rapid and accurate changes to their operations. Sales departments may be completely inadequate to handle the competitive environment and staff with marketing skills may be non-existent.

All of those things can cause the organizations which were built under the planned economy to be non-competitive and ultimately fail. In time, they are replaced by new companies which are far more efficient and adapted to the competitive environment, but that process cannot occur without the destruction of the old, unprofitable organizations. This process of "creative destruction" can cause social and political reactions, some of which may prolong the transition and make it more difficult for everyone.

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Soviet Union (USSR)
Planned Economy

Why did the Soviet Union had a command economy?

Simply because it is part of the Communist ideology (everything should be owed, set by the state).

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Planned Economy

What are the positives of a command economy?

social services

rapid change

will never go on a sudden depression

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Planned Economy

Compare the three economy questions to command economy market economy and traditional economy?

  1. traditional economy: resources are allocated based on custom and tradition
  2. mixed economy:resources are allcoated based on mixed informtion given.
  3. command economy: resources are allocated by the government or other central authority
  4. market economy: resources are allocated by individuals

Commusim

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Planned Economy

Can you name a country that has a planned economy?

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

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Planned Economy

Whats the difference between a capitalism and command economy?

The main difference between Capitalism and Command economy is that capitalism involved private enterprises where businesses are owned by private individuals while comman economies have public enterprises where the governemnt controls things including businesses and production.

A command economy is much more government controlled while a capitalism (or market economy) has much less government intervention. -dylan-

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Peru
Planned Economy

Does Peru use free market economy command economy or mixed economy?

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Planned Economy
Traditional Economy

What's the difference between a traditional economy and a command economy?

In a command economy the government decides how many of which goods are produced. But in a traditional economy the social roles and culture determine how goods and services are produced. Babies are produced by anal sex

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Planned Economy

Who gets what is produced in a command economy?

the citizens. Everyone in the country.

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Planned Economy

What is another term for planned economy?

Socialist system

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South Korea
Planned Economy

Is South Korea a command economy?

No. South Korea is a capitalist country.

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Planned Economy

What does the government control in a centrally planned economy?

Everything linked to money and production. Firms, taxes are some examples.

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