![]() There is a limited selection of goods and so consumers have little choice you can get your electricity form ZESA or ZESA.Very inefficient as there are no incentives such as profit look at Zimbabwe’s parastatals and you will understand why they are really dysfunctional.There is an incentive for the leadership to indulge and participate in corruption.In theory there is equitable distribution of wealth and low unemployment.Elimination of wastage as there is not duplication for example one base station in each location, one railway line to Mutare instead of many.things like electricity, security etc that would be difficult to provide in a free market economy In theory prices can be kept in control.What are the advantages and disadvantages of a command economy The government makes plans or blueprints that cover years to guide the economy.The main motive is to provide goods and services rather than profit.The government determines what to produce, how much to produce and for whom to produce.All/most of the means of production (resources) are owned and managed by the government.Although there are local differences command economies have the following features: The features of a command economyĬommand economies which are also known as Planned economies are closely associated with Socialist republics and communist countries such as China, the old Soviet Republic, North Korea, Cuba and Venezuela. There are three ways to solve this problem: a free market economy, a command economy and a mixed economy. ![]() Do we leave it to private enterprise or do it as government? For whom to produce?/Whom to give forex? All these issues are also known as the Economic Problem. What to produce?/What to import using scarce USD? How to produce? This means for example what procedures we use to import. This creates a problem how do we allocate these scarce resources.
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