MARKET AND PLANNED ECONOMY

Question 1

Define a Market Economy. Give an example.

Answer 1

Resources are owned privately and all decisions are made by the owners of resources acting in their own self interest.

E.g. Australia

Question 2

Define a Planned Economy. give an example.

Answer 2

An economy in which resources are owned collectively, and decisions are made by a planning authority is called a planned economy

E.g. Soviet Union (communism)