Difference between market economy and centrally planned economy
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A market economy is an economic system in which the decisions regarding investment, production, and distribution are guided by the price signals created by the forces of supply and demand.
A centrally planned economy is an economic system in which the state or government makes economic decisions rather than the interaction between consumers and businesses. ... State-owned enterprises undertake the production of goods and services.
A centrally planned economy is an economic system in which the state or government makes economic decisions rather than the interaction between consumers and businesses. ... State-owned enterprises undertake the production of goods and services.
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In a theoretical market economy, supply and demand through free competition should determine prices. ... The citizens are the ones who decide economic policy and prices of goods and services. In a centrally planned economy, the government makes decisions, instead of consumers and businesses.
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