Question

differentiate between centrally planned economy and a market economy​

Answer 1

Answer:

A centrally planned economy is the one in which economic activities (production, consumption and exchange) are governed by the government. Market economy is the one in which economic activities (production, consumption and exchange) are governed by the market forces of supply and demand.

Answer 2

Answer:

In a theoretical market economy, supply and demand through free competition should determine prices. Supply and demand also decide investment decisions, production, and distribution. ... In a centrally planned economy, the government makes decisions, instead of consumers and businesses.

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