10 Facts about Command Economy

Monday, May 1st 2017. | Economy

Have you ever learned facts about Command Economy? Why don’t you check facts about command economy below? It is not hard to define the command economy. This system of economy is characterized by the order of the government related to the production of goods in a society. This system can be found in a number of communist countries in the world. It is different from the free market because the government does not set the types of goods, price and quantities of goods to produce.

Facts about Command Economy 1: the countries with command economy

Can you mention the countries, which employ command economy? They included the former Soviet Union, North Korea and Cuba.

Facts about Command Economy 2: China

In the past, command economy was employed by the government of China. Today, the government tries to employ a mixed economy by combining the capitalistic and communist features in their economy.

Command economy

Facts about Command Economy 3: another name

Another name of command economy is planned economy because the system has been planned.

Facts about Command Economy 4: the free market economy

In the free market economy, the government will not intervene the competition of goods, quantities of good production and prices. Check facts about Canada’s Economy here.

Facts about Command economy

Facts about Command Economy 5: competition

Competition is prevalent in free market economy. In command economy, you will not spot any competition for all economic businesses are under the government.

Facts about Command Economy 6: the disadvantages

There are a number of disadvantages of command economy. It will be hard for the government to set the exact goods produced in their country. Moreover, the knowledge problem also occurs when allocating for goods.

Bank of China

Facts about Command Economy 7: consequences

The prevalent consequences of command economy are related to the surpluses and shortages of goods. The consumers and government are disconnected because need of the consumer is dynamic rather than static.

Facts about Command Economy 8: why people use command economy?

Command economy is still used until today because they believe that this system focuses on the social welfare. They criticize the free market due to the aim to maximize profit. Look at facts about China Economy here.