In a planned economy, who controls the factors of production

Question

Maleah Padilla

Business

13 January, 00:34

In a planned economy, who controls the factors of production

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Answers (1)

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Bria Sweeney · Answer 1

The government

Explanation:

A planned economy is also referred to as a command economy. In this economy, a central authority, mainly the government makes all the economic decisions in a country. The government, through its corporate agencies, own the factors of production.

Usually, the government makes and sets economic plans and goals for the country. It allocates resources as per the central plan. The government's plans determine the level of output, the goods and services to be produced, and their prices. It is the government's duty to use the country's factors of production of labor, capital, and natural resources in the most efficient way.