Planned Economy Flashcards
1
Q
Another word for Planned Economy?
A
Socialism
2
Q
What’s the definition of a planned economy
A
An economic system in which the government makes all decisions about the production and consumption of goods and services
3
Q
What are the characteristics of a planned economy
A
- Government, owns the lands, natural resources, factories and the farms
- People are not allowed to own property
- Government decides what should be produced and how much it should be sold for
- workers don’t have a say in what they want to do
4
Q
What are examples of countries with planned economies?
A
- Cuba
- Libya
- India
- China
- North Korea
- Iran
- Saudi Arabia
5
Q
What are the advantages of a planned economy
A
- Resources are used for the collective good of everyone
- Economically vulnerable are protected
- Economic equality is achieved
6
Q
What are the disadvantages of a planned economy
A
- Government can’t effectively process all relevant information enough to make good economic decisions
- there is no profit motive which motivates people to work hard
