Planned or state economic system
planned or state economic system is also known as command, communist, controlled, centralized, socialist state enterprise economic system.
In this type of economy, all the resources except labour is owned by government. The decision on how to solve the basics economic problems are made by the system include china, Cuba, Vietnam, North Korea.
Characteristics or features of planned economic system.
- State ownership and control of economic resources
- Consumers choice is restricted
- There is little or no competition
- There is absence of any form of personal income and wealth
Advantages of planned economic system
- It enjoys the advantage of economic of scale due to large scale production
- It provides basic needs to the population like roads, water, electricity etc.
- Wasteful competition is avoided
- There is stability and continuity in the production and distribution of commodities
- There is full utilization of economic resources by the states
Disadvantages of planned economic system
- There is complete absence of freedom of choice by consumers
- There Is lack of efficiency due to no competition
- It leads to too much bureaucracy; it laws are too much and lacks flexibility
- The economic progress is slow because of no private investment.
