The Centrally Planned Economy (Grade 11 NSC Matric Economics): Flashcards
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Centrally planned economy definition
Centrally planned economy definition
Gov't holds complete authority over all economic decisions
Private ownership in centrally planned economy
Private ownership in centrally planned economy
Absent; all major resources belong to state, not individuals
Central planning and control
Central planning and control
Gov't planners make detailed decisions on production & allocation
State entrepreneurship
State entrepreneurship
Government acts as primary business owner and operator
Income distribution advantage
Income distribution advantage
Gov't directly controls wages for even distribution across population
Employment advantage
Employment advantage
State employs everyone, achieving full employment
Price administration advantage
Price administration advantage
Gov't keeps essential goods affordable for all citizens
Workforce motivation disadvantage
Workforce motivation disadvantage
Limited; workers get similar rewards regardless of effort
Consumer goods disadvantage
Consumer goods disadvantage
Shortages occur when planning fails to match production with demand
Freedom restriction disadvantage
Freedom restriction disadvantage
Gov't limits where people can live, work, travel, and speak