GENERAL KNOWLEDGE

Detailed explanation-1: -Directive Planning: System of planning where planning is just used to direct the forces of supply and demand. There is no direct participation of the state in the process of growth and is solely there for ensuring law and order. This principal is mostly pursued in capitalist economies.

Detailed explanation-2: -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.

Detailed explanation-3: -In a socialist economy, the government appoints a separate central body for proper economic planning to solve economic problems of scarcity of resources and unlimited wants. Therefore, economic planning is an integral part of socialist economy.

Detailed explanation-4: -Directive planning refers to that system in which planning is introduced just to direct the forces of supply and demand so that system does not lose its stability or the state of equilibrium. In such a planning, there is no direct participation of the state in the process of growth.