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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.
359 Questions
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How did the command economy under Stalin differ from a capatalist economy?
A command economy is a system where the government controls economic activity and the production and distribution of goods. In a capitalist economy, such things are determined by market forces.
What country is an example of a planned economy?
A planned economy is one that is defined by " the economic system in which decisions regarding production and investment are embodied in a plan formulated by a central authority, usually by a public body such as a government agency". So essentially it is planned out by a government or similar body.
How are goods and services distribute in command economy?
You have asked a complicated question and the answer may not be so simple. A command economy is when the government controls everything and controls all aspects of business. Generally, communist countries have command economies. The former Soviet Union is an example of a command economy. Generally, private ownership of land is not allowed. Private ownership of land is allowed in a free market economy.
However, many countries have mixed economies. For example, although the state seized all land in the communist takeover of China in 1949, private land ownership for development is slowly creeping back into the national scene.
Why is there less economic growth with a command economy?
There is no motive to expand the economy in a command economy, whereas there are investors, changing demands, and prerogatives to improve production in a capitalist economy because of the competition that is lacking in a command economy.
Answer this question… A government orders a factory to produce military uniforms instead of civilian clothing.
How did the soviet command economy and the Russian market economy affect the Russian people?
Stalin increased jobs. He industrialzed the USSR and played a very major role in putting their military and armed forces to its height. The Russian people suffered greatly, massacres and from Stalin's ruthless war policies. However, polls showed somehow the Soviet Union still viewed Stalin as positive more than negative.
What problems might a command economy face?
1. What, and how much, to produce.
2. How to produce it.
3. For whom to produce it.
In a centrally controlled economy, the people being evaluated against the criteria for "success" are anxious to succeed. As a consequence, they are literal in their interpretation of the result criteria. if required to produce a number of ton of "crops," they grow turnips which are heavy, even if they do not meet consumer needs. If required to produce tractors, they ignore the fact that words like "usable", "working" or "functional" are missing from the instructions. They look "good" even if they are not delivering the implied results.
How did Stalin use command economy tovhis advantage?
They help to keep the economy in order.
"In order"implies that the government can make decisions in advance that are superior to those of private sector enrtreprenuers acting independently in a market economy economy on a daily basis.
The "order" that is provided is very likely to be comprised of desires and wishes of the "planners" charged with coming up with the plan rather than the realities of the marketplace. Command economies have failed over and over again.
What is one of the major disadvantage's of a centrally planned economy?
The fundamental disadvantage of a centrally planned economy is that local conditions, which often vary from one place to another (and can change rapidly), cannot be accounted for at the highest levels of planning. Another serious disadvantage is the cost incurred by such an economy's numerous executive agencies and administrators.
How is Russian economy adjusting to the difficulties of a centrally planned economy?
It has been adjusting well. There are many trade agreements going into affect and the Russian people seem to be embracing it.
What are the consequences of a planned economy?
- Inefficient resource distribution: surplus and shortage; The economic planners are unlikely able to accurately predict future supply and demand. Without market forces to adjust demand and supply you will likely end up with inefficiencies in production as a resut of surpluses for goods not wanted and shortages of goods which were desired.
- Suppression of economic democracy and self-management. Market forces allow entrepreneur and business to react quickly to market forces and ensure that there are less shortages and surpluses.
Why might a socialist society have a less rigid command economy than a communist socirty?
In a socialist society, various political systems may be combines with public control of the economy.
What type of economy has a socialist view of society?
Different socialists have different ideas about the role of public ownership, and socialist parties have changed their views, too. At the one extreme, some socialists have argued that all the main means of production should be owned either by the state or local authorities or co-operatives. Most social democratic parties in Europe have, when in office, at one time or other favoured 'mixed econmies' - that is, partly capitalist and partly public owned. (Consider for example, Britain around 1950). In recent decades, however, most European social democrats have tended to favour capitalism.
What statement describe one major aspect of a command economy?
Supply and demand determines what will be produced.
Does Taiwan have a command economy?
No, Taiwan does not have a command economy; it has a market economy. As of 2014, it is ranked as the 17th-freest economy in the world.
What are examples of command economy in the Caribbean?
Cuba is one of the command economies in the Caribbean.
Characteristics of centrally planned economy?
government ownership and control, equality (collective)
Who benefits and who suffers most from a centrally planned economy?
Who benefits:
- The Central Planners -- all of those bureaucrats are employed with the purpose of creating the central planning and, as a result, their very livelihood exists only by dint of the planned economy.
- Black Market Smugglers -- Black Market Smugglers get much more traffic for needed goods if the economy cannot anticipate people's needs and this happens very commonly in planned economies.
Who suffers: Everyone Else
- Entrepreneurs are banned from starting new businesses that sell their own products.
- Businesses have product overflows in some categories and shortfalls in many others.
- Common people cannot buy everything that they may need or want.
