Command Economy

What is a Command Economy?

• CAPITALISTIC economy in which there is free competition and prices are determined by interaction of supply and demand

• An economic system COMBINING private and public enterprise.

• When production, investment, price, and income are determined centrally by a GOVERNMENT.

• A system that relies on customs, history, and time-honored beliefs.

What countries have a Command Economy?

• Iceland, Sweden, France, Australia

• United States, Russia, Africa, Haiti

• India, United Kingdom, Brazil

• North Korea, Cuba, Soviet Union, China, Vietnam

What is one advantage of a Command Economy?

• Individual freedom for everyone

• Health and public services are available to everyone at little or no cost.

• The government rarely interferes.

• Able to adjust to change gradually

What is one disadvantage of a Command Economy?

• Requires large bureaucracy, which consumes resources

• Lower standard of living

• Does not produce enough public goods

• Workers and businesses face uncertainty as a result of competition and change.

A command economy is also known as a:

• Free enterprise system

• Consumer-driven economy

• Prosperous economy

• Planned economy

Command economies are usually dominated by:

• Free enterprise

• Traditions, customs, and beliefs

• State-owned enterprise

• All of the above

A large part of a command economic system is controlled by:

• a centralized power; federal government

• No one. It's an economy based off of individual freedom

Command economies cannot prevent mass unemployment.

• True

• False

The main strength of a command economy is that it can change direction drastically in a relatively short time:

• False

• True

A command economy gives people the motivation to work hard:

• True

• False