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National economies can be run from the top down, so to speak, in what is sometimes called a command economy or they can be run from the bottom up in what is sometimes called a free market. In the ...
Planned economies contrast with command economies in that a planned economy is "an economic system in which the government controls and regulates production, distribution, prices, etc." [39] whereas a command economy necessarily has substantial public ownership of industry while also having this type of regulation. [40]
There are several basic questions that must be answered in order for an economy to run satisfactorily. The scarcity problem, for example, requires answers to basic questions, such as what to produce, how to produce it and who gets what is produced. An economic system is a way of answering these basic questions and different economic systems ...
A centrally planned economy combines public ownership of the means of production with centralized state planning. This model is usually associated with the Soviet-type command economy. In a centrally planned economy, decisions regarding the quantity of goods and services to be produced are planned in advance by a planning agency.
In other words, what to produce and how much to produce. More production of a good implies more resources required for the production of that good, and resources are scarce. These two facts together mean that, if a society decides to increase the production of some good, it has to withdraw some resources from the production of other goods.
The economy of the Soviet Union was based on state ownership of the means of production, collective farming, and industrial manufacturing.An administrative-command system managed a distinctive form of central planning.
The economy of the German Democratic Republic (East Germany; GDR, DDR) was a command economy following the model of the Soviet Union based on the principles of Marxism-Leninism. Sharing many characteristics with fellow COMECON member states — the East German economy stood in stark contrast to the market and mixed economies of Western Europe ...
The economy of North Korea is a centrally planned economy, following Juche, where the role of market allocation schemes is limited, although increased to an extent. [ 11 ] [ 12 ] As of 2024 [update] , North Korea continues its basic adherence to a centralized planned economy .