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What do you mean by centrally planned economy?
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What do you mean by centrally planned economy?
Centrally Planned Economy:
Most of us go to stores, buy our goods, and go about our everyday lives without thinking much about who decided what products and goods to produce and distribute. We simply know what we need, and hope that the store we visit will have it in stock. However, what would happen if you went to the store one day to buy something - let's say cereal - and found that it was no longer being sold? And not just in your local market, but anywhere? You'd probably ask - why? And who made that decision? Well, the answer to these questions can be determined by exploring the term centrally planned economy.
So what is a centrally planned economy? Well, there are several parts to this definition. They are as follows:
- The government makes the economic decisions. This is different from the market economy that we are familiar with, in which businesses decide what they will produce, not the government.
- The government controls all aspects of the economic production. In other words, the government decides what goods will be produced and how they will be produced.
- The government decides how resources are distributed and used. For example, if the government thinks we need more goods in a particular area, they will make that decision, not the businesses in that area.
- The government needs to make the decisions. It is assumed that the needs of the people are not met in a market economy; therefore, in a centrally planned economy, the government controls decision-making.
- The government can determine the price of goods and services.
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Most Upvoted Answer
What do you mean by centrally planned economy?
Centrally planned economy refers to an economy in whoch the economy is owned , controlled and operated by the government of the country. themain objective of tis economy is social welfare
Community Answer
What do you mean by centrally planned economy?
Centrally Planned economy is the economy which is controlled and governed by the government or the centre.
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What do you mean by centrally planned economy?
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What do you mean by centrally planned economy? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What do you mean by centrally planned economy? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What do you mean by centrally planned economy?.
What do you mean by centrally planned economy? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about What do you mean by centrally planned economy? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What do you mean by centrally planned economy?.
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