Centrally planned economy and a market economy

Distinguish between a centrally planned economy and a market economy.

Expert Solution

Centrally planned economy

$*$ In a centrally planned economy, all the major economic decisions are taken by the government.

$*$ The government owns the means of production and distribution.

$*$ Prices are set by the government

$*$ An example of a centrally planned economy would be North Korea.

Market economy

$*$ In a market economy, the various economic decisions are left to the free market or the laws of supply and demand.

$*$ Private ownership of the means of production and distribution

$*$ Prices are determined by the relative demand and supply of the products.

$*$ An example of a market economy would be South Korea.

In a centrally planned economy, major economic decisions are made by a central authority. Centrally planned economies stand in contrast to market economies where large numbers of individual consumers and profit-seeking private firms operate most or all of the economy.

Ajay Kumar Gupta answered 3 years ago

Compare and contrast the advantages and disadvantages of a centrally planned economy and a market economy....

Compare and contrast the advantages and disadvantages of a centrally planned economy and a market economy. Share real world examples

Explain why a centrally-planned economy might not grow as rapidly as a market economy. 50 words...

Explain why a centrally-planned economy might not grow as rapidly as a market economy. 50 words minimum

1. Distinguish between a Pure Market Economy and a Centrally Planned Economy. Discuss how both forms...

1. Distinguish between a Pure Market Economy and a Centrally Planned Economy. Discuss how both forms of economies deal with... (a) The problems of scarcity and choice. (b) The price mechanism. (c) International Trade.

The dominant economic models today are the capitalistic free-market system, the centrally planned economy, and the...

The dominant economic models today are the capitalistic free-market system, the centrally planned economy, and the mixed economy. Please describe each and highlight the similarities and differences among them.

Capital Markets- One of the most fundamental differences between a market economy and a centrally planned...

Capital Markets- One of the most fundamental differences between a market economy and a centrally planned economy is the absence of capital markets in the latter. Discuss the problems of a system without the capital markets. Focus on the role of the capital markets in the “life of a firm.”

In general terms, discuss how the change from a centrally planned economy to a more market-based...

In general terms, discuss how the change from a centrally planned economy to a more market-based economy has affected career options and standards of living for the elderly, for young professionals, for unskilled laborers, for members of the military, for women, and for former government bureaucrats.

Imagine that Canada did not have a market-based economy, but instead had a centrally controlled, planned...

Imagine that Canada did not have a market-based economy, but instead had a centrally controlled, planned economy. So, instead of letting private businesses make decisions about what to make, these are all made by government-controlled manufacturers and producers. You are one of the central planners, in charge of making decisions about what the government should produce. Your focus is on clothing. Explain the information you would need to know to improve the social efficiency of the clothes that are produced....

Imagine that the leaders of a poor nation with a centrally planned economy become willing to...

Imagine that the leaders of a poor nation with a centrally planned economy become willing to try a different economic system, and hire an economist from a rich, market economy nation to advise them. The economist recommends a switch to a market economy. What will the economist suggest the leaders order their citizens to do?

Vietnam is a country undergoing transformation from a centrally planned socialist economy to a system that...

Vietnam is a country undergoing transformation from a centrally planned socialist economy to a system that is more market orientated. The transformation dates back to 1986, a decade after the end of the Vietnam War that reunited the north and south of the country under communist rule. At that time, Vietnam was one of the poorest countries in the world. Per capita income stood at just $100 per person, poverty was endemic, price inflation exceeded 700 percent, and the Communist...

Provide an outline for your “optimal” plan for economic reform for a centrally planned economy. Provide...

Provide an outline for your “optimal” plan for economic reform for a centrally planned economy. Provide a brief indication of the reason for your choices.

Question