Keyword Analysis & Research: command economy

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What are the problems of a command economy?

Command Economy. Command economies traditionally have been inferior to free market economies in their ability to allocate goods and services efficiently. This inefficiency creates shortages and wasteful surpluses. The problem is caused by the inability of the government central planners to accurately predict consumer demand preferences.

What motivates a command economy?

Increased Productivity. When people are motivated to work, there is increased productivity and increased output for the economy. In a command economy, where wages are set and desirable products may be in limited supply because the government doesn't consider them important enough produce, there is not as much worker motivation.

What are some of the benefits of a command economy?

It does not allow monopolizing. It is impossible for a monopoly to rule in a command economy because all the forces of the market are regulated by the government. No provider will be given control to set the market and rule aside from the government in power. Monopolizing exists in other economies, but not present in a...

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