Planned economy vs market economy

Question 1

What is a planned economy?

Answer 1

Planned economies are where the decisions on investments, production, distribution and pricing etc are made by the government

Question 2

What is the aim of a planned economy?

Answer 2

The aim of a planned economy is to increase the productivity by getting more information on production and deciding pricing accordingly

Question 3

What is the main feature of a planned economy?

Answer 3

The main feature of a planned economy is that the government has the authority and power to fix and regulate the market transactions

Question 4

What is the main advantage of a planned economy?

Answer 4

The government gets the ability to connect labour, capital, and profit together without any intervention leading to the ahievement of economic targets

Question 5

What is a market economy?

Answer 5

Where the decisions on production, investment and distribution are taken according to the market forces, i.e supply and demand

Question 6

What varies depending on supply and demand?

Answer 6

Decisions vary from time to time

Question 7

Is there a free price system?

Answer 7

Yes

Question 8

What is one of the main features of the market economy/?

Answer 8

They decide about the investments and production inputs through market negotiation

Question 9

What economies are in the current world?

Answer 9

Countries mix planned economies and market economies

Question 10

In a market economy, there can be both…

Answer 10

state owned enterprises and privately owned ones

Question 11

What do market economies operate on?

Answer 11

They operate on the supply and demand of goods and services