Acommand economy tends to exist under a communist government that provides little regulation. democratic government that provides some regulation. representative government that provides no regulation. socialist government that provides a lot of regulation.

A command economy tends to exist under a socialist government that provides a lot of regulation.

In a command economy system central government controls the larger part of the economic system.

Keywords: Economic system, Command economy

Level; High school:

Subject: History  

Topic: Economic system  

Sub-topic: Command economy

A command economy tends to exist under a socialist government that provides a lot of regulation. A country which based on the Command Economy rejects the existence of a free market because all of the economic aspects are centrally controlled by the government.

EXPLANATION

The command economy is an economic system where the government determines all aspects of the economy such as what goods must be produced, how much to produce, and the price at which goods are offered for sale. This system clearly rejects the existence of a free market. The command economy is a characteristic of the socialist/communist state.  

North Korea, Cuba, and the former Soviet Union apply the command economy system. On the other hand, China, which is a communist country, does not implement a command economy, although it have used the command economy for several decades before finally switching to a mixed economy.  

Here are some of the weaknesses of the Command Economy:

• Economic command in terms of providing incentives. The incentives are given to workers, planners, and managers in state-owned companies are very small.

• Rationally, Command Economic planning cannot determine the number of economic aspects such as the amount, proportion, and time of economic activity in all regions of the State without the existence of personal property or the operation of supply and demand.

Although the command economy has several weaknesses, adherents argue that their economic goal is to achieve equitable distribution and achieve social welfare rather than the profits of individuals who are glorified by capitalists.

LEARN MORE

If you’re interested in learning more about this topic, we recommend you to also take a look at the following questions:

• How did the fall of the Soviet Union affect Cuba’s economy?

KEYWORD: Economic Strategy, Socialist, Communist, North Korea, Cuba, China

Subject: Social Studies

Class: 7 - 9  

Subchapter: Command Economy

answer; the best answer is (demand);

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