produce goods and services to do so. The government allocates its resources based on these objectives and considerations. For example, suppose a communist country with a command economic system has macroeconomic objectives of producing military items to protect its citizens. The country is in fear that it will go to war with another country within a year. The government decides it must produce more guns, tanks, and missiles and train its military. In this case, the government will produce more military items and allocate much of its resources to do this. It will decrease the production and supply of goods and services that it feels the general public does not need. However, the population will continue to have access to basic necessities. In this country, the government feels military goods and services are socially efficient. How Do Command Economies Control Surplus Production and Unemployment Rates? Historically, command economies don't have the luxury of surplus production; chronic shortages are the norm. Since the days of Adam Smith, economists and public figures have debated the problem of overproduction (and underconsumption, its corollary). These issues were largely
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