Mastering Command Economies

A command economy is when there is a central authority, usually the government, that answers all the economic questions and controls all aspects of the economy.

The three basic economic questions are: what to produce, how to produce, and for whom to produce.

Some advantages of a command economy are: the ability to change directions quickly, the provision of public services at low or no cost, and the potential for rapid industrialization.

<p>Some disadvantages of a command economy are: stifled innovation and creativity, loss of individual incentives, difficulty in meeting the wants and needs of individuals, and the need for a large bureaucracy.</p> Signup and view all the answers

<p>The Soviet Union is an example of a country that had a command economy and experienced rapid industrialization.</p> Signup and view all the answers

<p>Mixed Economy = Combination of command and market economies Traditional Economy = Economic decisions based on customs and beliefs Command Economy = Central authority answers all economic questions Market Economy = Individual businesses and individuals have a say in economic decisions</p> Signup and view all the answers

<p>North Korea = Command Economy United States = Market Economy Sweden = Mixed Economy Tribal regions in Africa = Traditional Economy</p> Signup and view all the answers

<p>Command Economy = Stifles innovation and creativity Market Economy = Encourages innovation and creativity Mixed Economy = Balances government intervention and individual freedom Traditional Economy = Relies on established rituals, traditions, and practices</p> Signup and view all the answers

<p>Command Economy = Can change directions quickly Market Economy = Change in direction depends on market dynamics Mixed Economy = Change in direction depends on both government decisions and market dynamics Traditional Economy = Resistant to quick changes</p> Signup and view all the answers

<p>Command Economy = Requires a huge bureaucracy Market Economy = Can lead to economic inequality Mixed Economy = May suffer from inefficiencies due to government intervention Traditional Economy = May struggle to adapt to new technologies or methods</p> Signup and view all the answers