why is there no unemployment in a centrally planned economy
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The primary reason due which planned economies fail is the lack of information regarding market demand. In a market, economy firms produce goods that are in more demand.
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There is no unemployment in a centrally planned economy because-:
- A centrally planned economy is one which runs upon the decisions and maintenance of the central government. It is the duty and responsibility of that government to handle everything.
- Though this statement is not completely true in an economic sense as unemployment cannot ever be nil in any economy in regards to a centrally planned economy it is much lesser than the other economies which are not centrally planned.
- Here they provide employment opportunities to everyone and many times allocate jobs directly and the negative effect is also that the people might not have a say in it as they have to do the job they have been allotted.
- The government when is rigid does this to ensure that everyone gets employed. When it is a liberal one it only creates the necessary opportunities for people and leaves it up to them to decide what they want to perform for an earning or livelihood.
- They make sure that they are inclusive enough that they take into consideration especially the marginalised or weaker section into the umbrella of employment so that will in a way also contribute to the economy's growth as more employment means more output which further signals more national income of the country.
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