Econ T2.3 Command Economies.docx - Lesson 2.3 Centrally...

Lesson 2.3 Centrally Planned Economies
Lesson Objectives
1. Describe how a centrally planned economy is organized.
2. Distinguish between socialism and communism.
3. Analyze the use of central planning in the Soviet Union and China.
4. Identify the disadvantages of a centrally planned economy.
Key Terms : Define or identify each of the following terms
centrally planned economy : A planned economy is a type of economic system
where investment, production and the allocation of capital goods takes place
according to economy-wide economic plans and production plans. A planned
economy may use centralized, decentralized, participatory or Soviet-type forms
of economic planning.
command economy : an economy in which production, investment, prices, and
incomes are determined centrally by a government.
Socialism : a political and economic theory of social organization which advocates
that the means of production, distribution, and exchange should be owned or
regulated by the community as a whole.