Command Economy
Definition
A command economy is an economic system in which the government has control over the means of production and makes all major economic decisions.
Analogy
Imagine a school cafeteria where the lunch lady decides what food to serve, how much to charge, and who gets to eat. The students have no say in these decisions and must follow whatever the lunch lady decides.
Related terms
Mixed Economy: An economic system that combines elements of both command economy and market economy, with some industries controlled by the government and others left to private ownership.
Planned Economy: Similar to a command economy, a planned economy is one in which central planning authorities make decisions about production, distribution, and consumption.
State-Owned Enterprises: Companies or industries that are owned and controlled by the state or government. In a command economy, most enterprises are state-owned.
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