Command Economies Command Economies In a COMMAND ECONOMY

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Command Economies

Command Economies

Command Economies � In a COMMAND ECONOMY the government controls the factors of production

Command Economies � In a COMMAND ECONOMY the government controls the factors of production and makes all decisions about their use.

Command Economy � The government answers the 3 basic economic questions. 1. What? A

Command Economy � The government answers the 3 basic economic questions. 1. What? A dictator or a central planning committee decides what products are needed based on what they believe is important. 2. How? Since the government owns all means of production in a command economy, it decides how goods and services will be produced. The government employs all workers and controls all employment opportunities and benefits.

Command Economy � For Whom? The government decides who will get what is produced

Command Economy � For Whom? The government decides who will get what is produced in a command economy. Wealth is shared equally, to ensure everyone’s basic needs are met. The government provides housing, food, medical care, education, and jobs. � There is much security in this system.

Socialism � In a SOCIALIST political system, there is increased government involvement. � The

Socialism � In a SOCIALIST political system, there is increased government involvement. � The main goal is to keep prices low for all people and to provide employment for many. � The government runs key industries: ◦ ◦ Telecommunications Mining Transportation Banking

Socialism � More social services are given � Free or low cost medical care

Socialism � More social services are given � Free or low cost medical care � Education – Elementary through College � People pay higher taxes � A democratic political system, only with an increased amount of government involvement. ◦ Country examples: Canada, Germany, Great Britain, Sweden, and Australia

Communism � COMMUNIST countries have a totalitarian form of government. � This means that

Communism � COMMUNIST countries have a totalitarian form of government. � This means that the government runs everything and makes all decisions. � Theoretically, there is no unemployment. � People are assigned jobs � Told what kind of schooling they will receive � Told where to live

Communism � Free medical � Help with food and housing � The Communist party

Communism � Free medical � Help with food and housing � The Communist party is in charge. ◦ Country examples: Cuba, North Korea, and China

Mixed Economies � All economies in the world today are mixed. � There is

Mixed Economies � All economies in the world today are mixed. � There is some government involvement in each economy. � Depending on how much the government is involved is what kind of economy that country has.

Continuum of Economic Systems Capitalism Socialism Communism

Continuum of Economic Systems Capitalism Socialism Communism