ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A centrally planned economy, also known as a command economy, is an economic system where a government body makes economic decisions regarding the production and distribution of goods.

Detailed explanation-2: -In a command economy, the central government dictates the level of production of goods and controls their distribution and prices. Proponents of command economies argue government control rather than private enterprise can ensure the fair distribution of goods and services.

Detailed explanation-3: -The production of goods and services under capitalism is based on supply and demand in the general market-known as a market economy-rather than through central planning-known as a planned economy or command economy. The purest form of capitalism is free market or laissez-faire capitalism.

Detailed explanation-4: -Sometimes called a planned economy, in a command economy, the government decides which goods and services to produce, the production and distribution method, and the prices of goods and services.