Command Economy

  • Government ownership of the means of production. In command economies, governments will own some or all of the industries producing goods and services.
  • Government pricing and production decisions. In a command economy, production is decided by government agencies, who decide the most socially efficient goods to produce. Government agencies may also set prices or give consumers rations directly.
  • Government macro-economic objectives. In a command economy, the government will have over-riding macroeconomic objectives such as employment rates and what to produce.
  • Some centrally planned economies may consist of not just state-owned enterprises, but some privately owned firms who are closely directed by state management.

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