ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -In a planned system, the government exerts control over the allocation and distribution of all or some goods and services. The system with the highest level of government control is communism. In theory, a communist economy is one in which the government owns all or most enterprises.

Detailed explanation-2: -A command economy is characterized by the most government control over the economy.

Detailed explanation-3: -In communist nations, government makes all economic decisions; owns the land, natural resources, industry, banks, and transportation system; and controls all mass communication. Why have governments of communist nations such as China used a system of five year plans for the economy?

Detailed explanation-4: -In a true communist economy, the community makes decisions. In most communist countries, the government makes those decisions on their behalf. This system is called a command economy.

Detailed explanation-5: -What is communism? Communism is a political and economic system that seeks to create a classless society in which the major means of production, such as mines and factories, are owned and controlled by the public.