Command Economic System
Definition
A command economic system is an economic system where the government has complete control over the allocation of resources and production decisions.
Analogy
Imagine a school cafeteria where the principal decides what food to serve, how much of it, and who gets to eat it. The students have no say in the matter and must accept whatever is given to them.
Related terms
Market Economic System: An economic system where individuals and businesses make production and consumption decisions based on supply and demand.
Planned Economy: Another term for a command economic system, where central planning authorities determine resource allocation.
Price Controls: Government regulations that set maximum or minimum prices for goods or services.
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