Command or Socialist
economic systems are the system in which the state (government) determines
the resource allocation. This economy functions on the command of the state.
Features of Command or
Socialist economic system.
1) Social
ownership: The state owns and controls all economic
resources.
2) Planned production: All
productions take place according to a central plan. The planning authority
draws up and executes all the plans.
3) Production
of social goods: All productions are to serve social welfare (not for
profit).
4) Controlled price:
The prices are controlled by the government (administered price). 5) Complete control of the state:
Allocations of economic resources are also done according to the central
plan.
There are advantages
for command economic system, they are;
1) economic equality,
2)
reasonable use of resources,
3) social interest, and
4) planned development.
There are disadvantages
also for command economic system, they are;
1) lack of choices,
2) lack of
modern technology,
3) lack of competition and
4) monopoly decision of
government.
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