Asked by Alexandre Al Mokhtari on May 16, 2024
Verified
What is the main difference between a centrally planned economy and a market economy?
Centrally Planned Economy
An economic system where the government makes all decisions on the production and consumption of goods and services.
Market Economy
An economic system where supply and demand from consumers determine the production of goods and services.
- Comprehend the distinctions between a centrally planned economy and a market economy.
Verified Answer
KU
Kelvin UrquiaMay 20, 2024
Final Answer :
In a market economy, decisions are guided by prices and individual self-interest. In a centrally planned economy, economic activity is guided by the government.
Learning Objectives
- Comprehend the distinctions between a centrally planned economy and a market economy.