Question:
On the planet Krypton, the rulers have tried to govern their people using a market economy. However, they realized that something needs to change about their economic system. There is persisting inequality and most poor people are suffering due to lack of certain basic needs. Even the rich are complaining about the lack of proper infrastructure and facilities. The rulers have turned to Superman for a solution. Superman suggested that the government should have a role in certain economic activities. Explain what role the government might be able to play on planet Krypton?
Answers
Answer:
A centrally planned economy, also known as a command economy, is an economic system in which a central authority, such as a government, makes economic decisions regarding the manufacturing and the distribution of products. Centrally planned economies are different from market economies, in which such decisions are traditionally made by businesses and consumers.
The production of goods and services in command economies is often done by state-owned enterprises, which are government owned companies. In centrally planned economies, which are sometimes referred to as "command economies", prices are controlled by bureaucrats.
a centrally planned economy, major economic decisions are made by a central authority.
Centrally planned economies stand in contrast to market economies where large numbers of individual consumers and profit-seeking private firms operate most or all of the economy.
Centrally planned economies have been criticized by many economists as suffering from various economic problems related to poor incentives, informational constraints, and inefficiency.
Most developed nations have mixed economies that combine aspects of central planning with the free market systems promoted by classical and neoclassical economists. The majority of these systems skew heavily toward free markets, where governments intervene only to implement certain trade protections and coordinate certain public services.