Transforming command economies with out lossing government control on decision making is a big challenge for these economies. As market economies requires its own set of independent institutions to regulate the production activities. Read more for details by click, and try answer following answers.
1) Define command economies.[2]
2) Explain how command economies are different from the market economies. [6]
3) Analyse the problems of command economies in their transformation phase to market economies. [6]
4) Use information in the article and your knowledge of economics, discuss up to what extent government can influence the economic growth in an economy. [15]
1) Define command economies.[2]
2) Explain how command economies are different from the market economies. [6]
3) Analyse the problems of command economies in their transformation phase to market economies. [6]
4) Use information in the article and your knowledge of economics, discuss up to what extent government can influence the economic growth in an economy. [15]
1. Command economy is one of a type of economic system that has centralization, which is the government. This central will allocate the recourses in the economy.
ReplyDelete2. Market economy is the economy where the decision on allocating resources taken by the private sector itself. Command and market difference is in the power of the government. In market economy, government has very less power while in market economy, government has full power.
3. Transferring command economy into market economy will reduce the power of the government. When the government is not interfering in the market, there will be more effective allocation of resources. However, it will also result in unemployment because the ineffective employee will no longer employed or inflation because they adapt market mechanism. For the transformation itself, need the educated enterprise who's ready to enter and compete in the market and it requires time.
Well done Bella you have done a great job.
ReplyDelete1) It's an economic system in which all decisions are controlled by the committee (government) relating to the price fixation, allocations, distribution for resources.
2) Fix prices, controlled functioning of market, government rules and regulations makes commands economies different from the market economies where all economics decisions are left to market forces, government is just regulating and freely moving prices depending on demand and supply mechanism.
3) a) missing independent market regulating authorities, people are not used to behave in accordance to market forces, industries and government bodies are used to work on government dictates, missing competitive spirit, lacking authorities to promote individual rights, during transformation select few people having connection with government decision maker who take control to of public resources.