Which of the following is characteristic of a centrally planned economy? The central government makes all economic decisions. based on a free market, but allowing some government intervention.

Features of a Centrally planned economy

• Ownership by government.
• Decisions on what to produce, how to produce and how to distribute goods taken at national bureaucratic level.
• Prices usually set by price controls rather than market forces.
• Distribution according to ration books.

The last option is not characteristic of a centrally planned economy. In economies where the government plans everything from a large-scale point of view down to the little details, they assign people to certain jobs, and property and capital is state-owned.

A traditional economy is a system that relies on customs, history, and time-honored beliefs. Tradition guides economic decisions such as production and distribution. Societies with traditional economies depend on agriculture, fishing, hunting, gathering, or some combination of them. They use barter instead of money.

A command economy has a small number of typical elements: A central economic plan, government ownership of the means of production, and (supposed) social equality are essential features of a command economy.

Two current examples of a traditional or custom based economy are Bhutan and Haiti. Traditional economies may be based on custom and tradition, with economic decisions based on customs or beliefs of the community, family, clan, or tribe.

Advantages of a Traditional Economy Traditional economies produce no industrial pollution, and keep their living environment clean. Traditional economies only produce and take what they need, so there is no waste or inefficiencies involved in producing the goods required to survive as a community.

The advantages and disadvantages of the traditional economy are quite unique. There is little waste produced within this economy type because people work to produce what they need. That is also a disadvantage, because if there is no way to fulfill production needs, the population group may starve.

There are benefits and drawbacks to command economy structures. Command economy advantages include low levels of inequality and unemployment, and the common good replacing profit as the primary incentive of production. Command economy disadvantages include lack of competition and lack of efficiency.

The command economy is a key feature of any communist society. Cuba, North Korea, and the former Soviet Union are examples of countries that have command economies, while China maintained a command economy for decades before transitioning to a mixed economy that features both communistic and capitalistic elements.

Five Characteristics of a Command Economy

• The government creates a central economic plan.
• The government allocates all resources according to the central plan.
• The central plan sets the priorities for the production of all goods and services.
• The government owns monopoly businesses.

Command economy, economic system in which the means of production are publicly owned and economic activity is controlled by a central authority that assigns quantitative production goals and allots raw materials to productive enterprises.

The goal of a command economy is for governments – not private enterprises – to manage country economies. In a command economy (also known as a planned economy), government central planners determine what goods and services will be produced, the amount of goods and services produced, and at what cost to the consumer.

Terms in this set (6) What are the disadvantages of a Traditional Economy? A Change of economy is discouraged and perhaps punished, and one in which the methods of production are inefficient.

List of Traditional Economy Disadvantages

• It isolates the people within that economy.
• Large outside economies can overwhelm a traditional economy.
• It offers few choices.
• There may be a lower overall quality of life.
• It creates specific health risks.
• Unpredictability creates survival uncertainties.