A centrally planned economy is an economic system in which the government controls and manages the allocation of resources, production, and distribution of goods and services.
Economic systems refer to the type of economic structure a nation has. For example, socialism is a type of economic system which relies on centralised control of resources. Other types of economic systems may rely more heavily on the free market, whilst others might be a mix of the two.
Socialism is an economic system where the means of production are collectively owned and resources are allocated based on need, while capitalism is an economic system where private individuals and businesses own and operate the means of production for profit and resources are allocated based on market demand and supply.
Table of Contents Introduction Historical Background Fundamental Principles Economic Structures Political Systems Real-World Examples Criticisms and Challenges Conclusion FAQs Socialism vs Communism Written by Paul Boyce Posted in Microeconomics > Economic Systems Last Updated May 3, 2023 Introduction Socialism and Communism are often used interchangeably to describe economic systems that challenge the principles of capitalism.