Centrally Planned Economy - Explained
What is a Centrally Planned Economy?
Written by J. Mance Gordon
Updated at April 23rd, 2024
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What is a Centrally Planned Economy?
A planned or centralized economy is one in which the key questions of the economy about what, how, and for whom to produce are resolved directly by the State.
How Does a Centrally Planned Economy Work?
In a centrally planned economy, the Government generally controls private property for the collective society in an effort to support production, exchange, and distribution.
The main objective of the planned economy is the equal distribution of income. To this end, the State must intervene in the economy and be responsible for the tasks of distributing resources.
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