planned economy

Examples of planned economy in the following topics:

• Differences Between Centrally Planned and Market Economies

  • The key difference between centrally planned and market economies is the degree of individual autonomy.
  • A pure planned economy has one person or group who controls what is produced; all businesses work together to produce goods and services that are planned and distributed by the government.
  • Planned economies have several advantages.
  • Although they avoid many of the inadequacies of planned economies, market economies are not free of their own problems and downfalls.
  • Lenin, is an example of a country that tried to establish a pure centrally planned economy.

• Socialism and Planned Economies

  • A planned economy is a type of economy consisting of a mixture of public ownership of the means of production and the coordination of production and distribution through state planning.
  • Economic planning in socialism takes a different form than economic planning in capitalist mixed economies.
  • In socialism, planning refers to production of use-value directly (planning of production), while in capitalist mixed economies, planning refers to the design of capital accumulation in order to stabilize or increase the efficiency of its process.
  • Enrico Barone provided a comprehensive theoretical framework for a planned socialist economy.
  • The command economy is distinguished from economic planning.

• Mixed Economies

  • A Mixed Economy exhibits characteristics of both market and planned economies, with private and state sectors providing direction.
  • A mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.
  • Subsequently, some mixed economies have expanded in scope to include a role for indicative economic planning and/or large public enterprise sectors.
  • Economies ranging from the United States to Cuba have been termed mixed economies.
  • Outline the plan behind and what governments provide in a mixed economy

• The Communist Economic System

  • An economy characterized by Command Planning is notable for several distinguishing features:
  • Local planning authorities are handed 1 year, 5 year, 10 year or, in the case of China, up to 25-year plans.
  • Labor is allocated according to state plans: in a command planning economy, there is no choice of profession; when a child is in school (from a very early age), a streaming system allocates people into designated industries.
  • Often a currency does not exist in a command planning economy and when it does, its main purpose is for accounting.
  • Explain how a communist economic system is representative of a command planned economy

• Introducing Aggregate Supply

  • Aggregate supply is the total supply of goods and services that firms in a national economy plan to sell during a specific time period.
  • In economics, aggregate supply is the total supply of goods and services that firms in a national economy plan to sell during a specific time period.
  • Aggregate supply is the relationship between the price level and the production of the economy .
  • In the equation, Y is the production of the economy, Y* is the natural level of production of the economy, the coefficient α is always greater than 0, P is the price level, and Pe is the expected price level from consumers.
  • In the equation, Y is the production of the economy and Y* is the natural level of production of the economy.

• Mixed Economies

  • A mixed economy is a system that embraces elements of centrally planned and free market systems.
  • A mixed economy is a system that embraces elements of centrally planned and free market systems.
  • Most modern economies are mixed, including the United States and Cuba.
  • However, to mitigate the negative influence that a pure market economy has on fairness and distribution, the government strongly influences the economy through direct intervention in a mixed economy.
  • Generally, individuals in mixed economies are able to:

• Economic Systems

  • Examples of centrally planned systems are communist countries, such as North Korea and Cuba.
  • Most other countries today are free market economies, with some aspects of a planned system (such as government owned and allocated healthcare).
  • In theory, a communist economy is one in which the government owns all or most enterprises.
  • In general, workers in socialist economies work fewer hours, have longer vacations, and receive more health, education, and child-care benefits than do workers in capitalist economies.
  • The economies of the United States and other countries, such as Japan, are based on capitalism.

• Aggregate Expenditure at Economic Equilibrium

  • An economy is said to be at equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • The GDP of an economy is calculated using the aggregate expenditure model.
  • An economy is said to be at equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • The aggregate expenditure equals the aggregate consumption plus planned investment.
  • The aggregate expenditure is the aggregate consumption plus the planned investment (AE = C + I).

• Defining Aggregate Expenditure: Components and Comparison to GDP

  • Aggregate expenditure is the current value of all the finished goods and services in the economy.
  • The aggregate expenditure determines the total amount that firms and households plan to spend on goods and services at each level of income.
  • The gross domestic product is important because it measures the growth of the economy.
  • An economy is at equilibrium when aggregate expenditure is equal to the aggregate supply (production) in the economy.
  • The economy is not in a constant state of equilibrium.

• The Truman Doctrine and the Marshall Plan

  • American military force was usually not involved, but Congress appropriated free gifts of financial aid to support the economies and the military of Greece and Turkey.
  • The Marshall Plan (officially the European Recovery Program) was an American initiative to aid Western Europe, in which the United States gave $13 billion in economic support to help rebuild Western European economies after the end of World War II.
  • The Marshall Plan offered the same aid to the Soviet Union and its allies, but they did not accept it, as to do so would be to allow a degree of U.S. control over the Communist economies.
  • By 1952, as the funding ended, the economy of every participant state had surpassed pre-war levels; for all Marshall Plan recipients, economic output in 1951 was at least 35% higher than in 1938.
  • The Marshall Plan was one of the first elements of European integration, as it erased trade barriers and set up institutions to coordinate the economy on a continental level—that is, it stimulated the total political reconstruction of western Europe.