Unformatted text preview: ough a central economic
plan and are performed by a central planning board
appointed by the government.
Chapter 2 6 It would benefit us at this point to learn a bit more
about command systems.
• In these systems, the government traditionally
owns most of the property and controls decisions
regarding the use of scarce resources.
• Production and distribution decisions in command
systems are performed by central planning
committees. These committees are appointed by
the government and are charged with the task of
devising a central plan to follow over time.
• These plans address what will be produced, what
resources will be used in production, how to
distribute the output, how to accommodate
change, and how to integrate change in the
process. Learning Objective 2-1 Slide
7 Are command systems efficient?
Generally speaking, command economic systems are
not very efficient.
Accurately predicting the future needs in terms of
consumer goods and services and capital goods and
services is very difficult in command systems for a
number of reasons, but particularly so because
systems are dynamic with changing needs and
committees are entities making static decisions.
In summary, command e...
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This note was uploaded on 09/10/2009 for the course ECO 2251 taught by Professor Kirkland during the Spring '09 term at Troy.
- Spring '09