McConnell_Brue_Chapter02

These decisions occur through a central economic plan

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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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