EconomiesEconomies

Command EconomyCommand Economy

The central government regulate The central government regulate various factors of production.various factors of production.

The government is the final The government is the final authority to take decisions authority to take decisions regarding production, utilization regarding production, utilization of products and the allocation of of products and the allocation of the revenues earned.the revenues earned.

Command EconomyCommand Economy

Generally, a CE is more stable.Generally, a CE is more stable. It is least affected by financial It is least affected by financial

downturns and inflations.downturns and inflations. In a carefully planned CE, both In a carefully planned CE, both

production and unemployment production and unemployment rates remain at a reasonable rates remain at a reasonable level.level.

Market EconomyMarket Economy

A type of economic system in A type of economic system in which the trading and exchange which the trading and exchange of goods, services and of goods, services and information takes place in a free information takes place in a free market.market.

A market economy may therefore A market economy may therefore also be known as a free market also be known as a free market economy. economy.

Market EconomyMarket Economy

The law of supply and demandThe law of supply and demand– The market itself will determine the The market itself will determine the

price of goods and services.price of goods and services. Mixed economies blend market Mixed economies blend market

and command economies, mixing and command economies, mixing gov’t control and supply and gov’t control and supply and demand.demand.