Planned Economies
Planned economies are those in which the government controls and
regulates production, the use and allocation of what is produced and the
revenue from its production. A planned economy can also be referred to as a
command economy. China and the former Soviet Union are two examples of this
type of economy. A planned economy is the opposite of a market economy, which
is driven by private enterprise. A planned economy can include both state-owned
and privately-owned but state-directed businesses. Economists have pointed out
several advantages of planned economies.
DISADVANTAGES:
-Goods are produced based on what the
government wants not public
-Shortages of consumer goods
-Poor work motivation because fixed income
-Lack of outside innovation
-If the government provides goods and
services, it needs to raise taxes to cover the cost of doing so
ADVANTAGES:
-Basic needs meet
- Government has power to give goods and
services / more money to people that it thinks needs them/poor people
-Stability
-No need for marketing
Mixed Economies
DISADVANTAGES:
-
Poor people are unable to
afford goods and services
DISADVANTAGES:
-
They only take into account
their own costs and benefits when producing goods and services
