A **command economy** is an economic system where the government centrally plans and controls the production, distribution, and pricing of goods and services. Unlike market economies, decisions about resource allocation are not driven by supply and demand but by government directives.
### Key Features:
1. **Central Planning**: Authorities set production targets, allocate resources, and control industries.
2. **Ownership**: Most assets and enterprises are state-owned.
3. **Limited Consumer Choice**: Production focuses on government priorities rather than consumer demand.
### Advantages:
- Reduces income inequality.
- Focuses resources on national goals like infrastructure or defense.
### Disadvantages:
- Inefficiency due to lack of competition.
- Limited innovation and poor quality of goods.
Examples include former Soviet Union and North Korea.
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