![]() This type of economy empower governments of countries practice it in terms of financial strength and making economic decisions. There are other salient features of command economies aside from the overwhelming intervention of government that replace market forces or mechanisms. ![]() What are some features of Command Economies? ![]() Instead of market forces or mechanisms, centralized authority are prominent in command market, this market features no competition since the government has total control. The government manages the market or economy in a command market as against what we have in free markets where the government has little or no intervention in means of production and prices of market. Unlike free markets where production and prices of goods and services are determined by demand and supply, command markets are controlled by a central authority (the government). The types of goods produced and the rates they are sold are also controlled by the government. The means of production are publicly owned in a command economy. Back to: ECONOMIC ANALYSIS & MONETARY POLICY How does the Command Economy Work? Communist societies such as Cuba, Soviet Union and North Korea use command economy. In a command economy, the government determines all investments and incomes, it also determines the amount at which the goods that are produced are sold. A command economy can also mean a planned economy where the government has the absolute authority to determine means of production include what is produced, how they are produced. Update Table of Contents What is a Command Economy? How does the Command Economy Work? Academic Research on Command Economy What is a Command Economy?Ī command economy is a structure established by the government in which all the means of production are owned and controlled by the government which serves as the central authority.
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