Definition
What is the definition of a Command Economy?
An economic system in which production decisions are made by government appointed central planners.
Who was the leader of China during their command economy?
Mao Zedong.
What is the type of planning command economies use?
Centralised planning.
What production problems would occur from command economies?
Overproduction or underproduction.
What is the system the government uses to motivate workers?
The Reward and Punishment system.
What is the year China switched from a command economy?
1979.
How can command economies avoid market failure?
Long term plans and Rules.
What actions did customers resort to because of shortages?
Bribery and black market.
What type of goods command economies prioritise?
Capital Goods.
What is the main priority of the Soviet Union?
Military and Industry.
How can economies efficiently use resources?
Allocating resources to the most important industries like education or healthcare.
What are areas that were often underdeveloped due to priority of military power?
Technology innovation and medicine.
What items workers spend their wages on?
Food, shelter and clothing.
What incentives did the Cuban government used for Cubans to accept low wages?
Free health care, public education, affordable housing and subsidized food programs.
How can command economies use central power to improve living conditions.
Allocating resources to improving said living conditions across all sectors.
What is the effect of zero incentives in a command economy?
Slow economic growth and reduced productivity.
What other economies are the trade partners for command economies?
None or sometimes other command economies.
What was the time period in which a famine killed 45 million Chinese citizens?
1958 to 1962.
How does a command economy affects the unemployment rate?
Reduces unemployment significantly through centrally planned job plans.
What intangible resource is wasted in command economies?
Entrepreneurship.