Question

Why might a country move from one economic system to another? What are the advantages of a command economy? The disadvantages?
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Answer 1

Answer:

There are benefits and drawbacks to command economy structures. Command economy advantages include low levels of inequality and unemployment, and the common good replacing profit as the primary incentive of production. Command economy disadvantages include lack of competition and lack of efficiency.

Answer 2

Challenges once Transitioning. blessings and downsides of a command economy

Transition Economy:

• A transition economy is that's shifting from a planned economy to a free-market economy.
• A planned, or command, economy is one during which the central government makes all of the choices concerning however resources like land, labor, and capital (money and alternative material assets) square measure allotted to supply product and services. in an exceedingly planned economy the govt. sets the costs for product and services, dictates provide (the quantity of products and services produced), and tries to control demand (the quantity of products and services that customers need to buy) to match provide.
• This stands in distinction to a free-market economy, during which provide and demand don't seem to be regulated by the govt.. in an exceedingly free-market economy, costs square measure determined by a range of things, as well as what shoppers square measure willing to get hold of product and services and therefore the range of companies competitory for client greenbacks.
• In line with most consultants, the transition from a planned economy to a free-market economy takes a minimum of ten years.
• Kazakhstan has created goodly progress in shifting from command to a economy. The transition method towards a "market economy was expected to boost the economic performance" of the country that successively was anticipated to uplift the lifetime of a typical man. This study, therefore, aims" to look at the impact of economic freedom on economic growth" of Kazakhstan.
• The results indicate that although the reform method of Kazakhstan is in an exceedingly transition part, nonetheless economic freedom has contributed positively" towards the economic growth" of the country.
• "The results additionally indicate that in sub-indicators of economic freedom, financial freedom" and protection of ownership have contributed to the expansion of Kazakhstan's economy whereas a rise in government size impedes the economic process of the country."

Advantages and downsides of a command economy:

1. Operations square measure consistent inside a command economy.

• Within the structure of a command economy, the companies that do operate square measure in operation at the bid of the govt.
• Their structures square measure determined by the govt., therefore there's consistency inside the operational structures of every business.

2. It creates a versatile industrial sector.

• Industries square measure directly operated or controlled by the govt. in an exceedingly command economy, therefore their resources may be applied to no matter project has to be completed. This creates a flexibility inside the economic sector that alternative economy formats cannot match.
• If there's a huge project that has to be completed, the govt. will quickly transfer the resources that square measure necessary to induce the duty finished.

3. the precise demands of a society may be met.

• Within the structure of a command economy, the govt. seeks to maximize its potency.
• To do this, it'll decide to meet the precise demands that individuals have. By limiting over-production of things, there's less waste that happens inside the society.

4. Any resource will work with the other resource.

• Can you imagine Apple and Samsung operating along to supply technologies? Or Ford and General Motors operating along to make automobiles? in an exceedingly free economy, businesses vie with one alternative to supply higher merchandise.
• In an exceedingly command economy, any resource may be determined to figure with the other resource.

Disadvantages of a Command Economy:

1. it's a governmental structure that reduces personal freedoms.

• Because all economic structures square measure at the gesture and decision of the govt., personal freedoms square measure restricted inside a command economy.
• In several instances, individuals will work one sort of job and should do therefore as a result of the govt. demands it. Refusal may mean jail time… or worse.

2. It limits innovation.

• There is no would like for production to hunt out analysis and development inside a command economy as a result of the govt. dictates everything. individuals should settle for what the govt. provides them.
• This implies there's no ought to create merchandise higher tomorrow than they're these days.

3. It encourages prohibited activities.

• Within a command economy, individuals cannot invariably get what they have to satisfy the fundamental desires of living.
• To induce these things,  underground market prospers in order that product or services that square measure required may be received outside of state management.

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