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    Lavanya Sharma
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    In a planned economy, the government owns and manages all resources and makes all decisions regarding investment, production, and allocation of capital goods. The government determines what to produce, how much to produce, and for whom, aiming to maximize social welfare rather than profit. Prices are usually set by government price controls rather than market forces. Examples of planned economies include North Korea, Cuba, Turkmenistan, Myanmar, Belarus, Laos, Libya, and Iran.

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    In a planned economy, the government owns and manages all resources and makes all decisions regarding investment, production, and allocation of capital goods. The government determines what to produce, how much to produce, and for whom, aiming to maximize social welfare rather than profit. Prices are usually set by government price controls rather than market forces. Examples of planned economies include North Korea, Cuba, Turkmenistan, Myanmar, Belarus, Laos, Libya, and Iran.

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    159 views8 pages

    Planned Economy

    Uploaded by

    Lavanya Sharma
    In a planned economy, the government owns and manages all resources and makes all decisions regarding investment, production, and allocation of capital goods. The government determines what to produce, how much to produce, and for whom, aiming to maximize social welfare rather than profit. Prices are usually set by government price controls rather than market forces. Examples of planned economies include North Korea, Cuba, Turkmenistan, Myanmar, Belarus, Laos, Libya, and Iran.

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    of 8

    Planned Economy

    Group 4
    Defining the
    System
    An economic system is a system of production, resource allocation and
    distribution of goods and services within a society or a given area. It includes
    the combination of the various institutions, agencies, entities, decision-making
    processes and patterns of consumption that comprise the economic structure
    of a given community.

    A centrally planned economy, also known as a command economy, is a type


    of economic system where investment, production and the allocation of capital
    goods take place according to the government. A planned economy may use
    centralized, decentralized or participatory forms of economic planning
    The features of a planned
    economy
    ● All resources are owned and managed by the government.
    ● There is no Consumer or producer sovereignty, the Government decides
    what to produce, how much to produce and for whom to produce,
    discouraging market competition.
    ● Profit in not the main objective, instead the government aims to provide
    goods and services to everybody.
    ● Its goal is to allocate resources to maximize social welfare.
    ● Prices usually set by price controls rather than market forces.
    Planned Economy

    Ownership Industry owned and managed by the government


    Incentives Government give little incentive to be efficient and profitable
    Prices Price controls
    Efficiency Government owned firms have less incentives to be efficient
    Equality Government may provide more equitable distribution of
    resources
    The advantages and disadvantages of a planned
    economy
    Examples of planned
    economies:

    1. North Korea 5. Belarus


    2. Cuba 6. Laos
    3. Turkmenistan 7. Libya
    4. Myanmar 8. Iran
    Additional information:

    ★ Planned economic systems made possible the building of great cities, the
    application of new technologies that improved living conditions, and
    such cultural advances as written language and artistic achievement. The
    benefits of the system were typically only enjoyed by the ruling classes
    of society, however.
    ★ Even the most market-oriented economies typically yield to some
    amount of government planning, especially in areas where society’s
    well-being might be most directly threatened, such as in health care and
    national defense.
    Thank you for
    Bibliography:
    watching!
    https://www.economicshelp.org/

    https://www.dineshbakshi.com/economics

    https://www.encyclopedia.com/

    https://en.wikipedia.org/wiki/Economic_system

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