What cannot be done by the government in a command economy

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Social Studies

9 March, 06:08

What cannot be done by the government in a command economy

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Gabriella Willis · Answer 1

In a command economy, the government can not establish means that will influence competition between companies.

Explanation:

Command economy is an economic system in which the economy of a given country is directed and supervised solely by the state. In this context, all important decisions and all that generates income not only belong to the government but are controlled by it.

This model of economy differs from the market economy, where the rule of supply and demand prevails, and the control of goods and products is totally given to the government. In this way, the income and resources obtained in production and commerce are equally divided among all. In the planned economy there is no competition, and the only purpose of this system is to promote growth and collective well-being.

Although the focus of this economic model is not based on profits but on the collective good, the planned economy can also offer advantages to companies and organizations that aim to develop their internal processes and resources. By adapting this system to corporate needs, it can foster business growth and development.