Understanding Command Economies

The video discusses the command economy, highlighting its disadvantages such as ignoring societal needs, restricting freedom, fostering black markets, hindering innovation, causing goods imbalance, export issues, lack of competition, and coordination difficulties. It also outlines the characteristics of a command economy, including government control and central planning. The video concludes by introducing the mixed economic system as the next topic.

What is a major disadvantage of a command economy regarding individual freedom?

• There is no government intervention in personal choices.

• Individuals have complete freedom to start businesses.

• The government controls all aspects of life, limiting personal freedom.

• Citizens can choose their career paths freely.

Why might a black market develop in a command economy?

• Because citizens have too much freedom.

• Because the government encourages private trade.

• Due to the abundance of goods and services.

• As a result of governmental restrictions on goods and services.

How does a command economy affect innovation?

• Innovation is the main focus of the economy.

• The government funds all innovative projects.

• Innovation is not prioritized and often discouraged.

• It encourages innovation by providing resources.

What problem arises from the unbalanced production of goods in a command economy?

• The government ensures perfect balance in production.

• There is no production of goods at all.

• Some goods are overproduced while others are underproduced.

• All goods are produced in equal quantities.

What challenge does a command economy face in the international market?

• It easily adapts to international market demands.

• The government struggles to determine successful products and prices.

• It has no issues with international trade.

• The economy is highly competitive internationally.

Why is competition absent in a command economy?

• The government owns all industries and discourages competition.

• There are too many private businesses.

• Competition is encouraged by the government.

• The economy is based on free-market principles.

What is a coordination issue in a command economy?

• Demand and supply are always perfectly matched.

• Coordination of production and trade is often impossible.

• There are planners who coordinate all economic decisions.

• Efficient coordination is easily achieved.

What is a key characteristic of a command economy?

• Private businesses set their own production goals.

• The central government creates and enforces a central economic plan.

• There is no government involvement in the economy.

• It is driven by consumer demand.

Which countries are examples of a command economy?

• North Korea and Cuba

• Germany and France

• United States and Canada

• Japan and South Korea

What is the main goal of a command economy regarding societal needs?

• To prioritize luxury goods over basic needs.

• To ensure employment and meet basic needs for everyone.

• To ignore societal needs completely.

• To allow private companies to decide societal needs.