A planned economy, also known as a command economy or a centrally planned economy, is an economic system in which the government remains in control of the market. This system does not allow any freedom for sellers to change their prices or change their products, but is ensures that everyone has access to the same products for the same price. Planned economies still exist in some places, however there is no longer total control over the market. Other than some countries such as North Korea or Cuba, planned economies are mixed with a free market economy, which then becomes a mixed economy.
Some advantages of having a planned economy include ensuring that there is always a production of the necessary needed goods. It also promotes stability by creating control, so that the market can be manipulated as is seen fit.
An example of a country that used a planned economy at one point was the Soviet Union. Before its collapse,
the Soviets had the second strongest economy in the world; their economy was a result of extremely smart
central planning, and a country that was willing to grow. It also however, resulted in a massive decrease in the quality of life for Soviet citizens.
Some advantages of having a planned economy include ensuring that there is always a production of the necessary needed goods. It also promotes stability by creating control, so that the market can be manipulated as is seen fit.
the Soviets had the second strongest economy in the world; their economy was a result of extremely smart
central planning, and a country that was willing to grow. It also however, resulted in a massive decrease in the quality of life for Soviet citizens.
Bibliography:
http://en.wikipedia.org/wiki/Planned_economy
http://www.wtec.org/loyola/displays/c6_s1.htm