In a Planned Economy, the government decides what is produced, by whom and for whom

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In a Planned Economy, the government decides what is produced, by whom and for whom. The government can also decide in what quantities are these items to be produced. This leads the government to controlling the use of resources in addition to the control of what labor produces and where to produce it, after producing these goods the government plans what to do with these goods.

Market forces, which are supply and demand, do not decide who receives goods and services, Most Communist countries (e.g. China, Cuba, USSR before 1989 and other communist countries) are all examples of centrally planned economies. Planned Economies can also be called 'command economies.

In a Centrally Planned Economy or a Command Economy Consumers usually have little choice; this is because there is sometimes no private property which means that the government can only produce these goods. This also means that the government can control the profits on these goods.

  1. Wealth is more evenly distributed among the population because all labor works for the government, and wages given to workers from the government are fixed which makes all workers equal leaving no chance for other people to earn more.

  1. Essential Services such as justice, security, etc. are more appropriately controlled by the government than by private enterprise.
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  1. When capital outlay for products/services is large, e.g. infrastructure, the government may have more money available than private enterprise

  1. Low Unemployment

  1. The government control eliminates any waste resulting from competition between firms, for example when 2 competitive companies produce the same good a decrease of profit might be needed in order to compete, but in the planned economy case the government only supplies goods.

  1. The needs of the population are met; but there is little production of luxury goods for the wealthy. Most of the population have their essential needs (e.g.: shelter, food, etc...) but luxury ...

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