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Planned Market And Mixed Market Economies

Decent Essays
Planned, Market, and Mixed Economies
Each country has its own economic system, a “system for allocating its resources among its citizens, both individual and organizations” (Ebert & Griffin, 2015, p. 11). There are three economic systems: planned economies, market economies, and mixed market economies. Economic systems are defined by how the five factors of productions are handled: labor, capital, entrepreneurs, physical resources, and information resources. Factors of production are “the resources that a country’s businesses use to produce goods and services” (Ebert & Griffin, 2015, p. 11).
Planned Economies
A planned economy can be defined as an “economy that relies on a centralized government to control all or most factors of production and to make all or most production and allocation decisions” (Ebert & Griffin, 2015, p. 12). There are two forms of planned economies: communism, in which the government owns and operates all factors of productions, and socialism, where the government owns and operates only selected factors of productions. China and North Korea are both examples of current communist countries; Denmark and Sweden are both examples of current socialist countries.
Planned Economies and Labor Factor of Production
“People who work for businesses provide labor. Labor, sometimes called human resources, includes the physical and intellectual contributions people make while engaging in economic productions” (Ebert & Griffin, 2015, p. 11). In a communist planned
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