Free Market VS PLanned Economy
Jose Ramon Neira Tejeda
Economics 12 NS
Economy is a Careful, thrifty management of resources, such as money, materials, or labor in a specific country, region or community.
A Planned Economy is a economic system, where all economic decision are made by planners. the planners determine what kind of goods and services to produce, what should the price of this good and services be and allocated. Most known planned economies rely on plans made by the way of command, therefore they are widely known as command economies. Command Economies (Planned Economies) are generally associated with socialist or communist economy systems.
A free market economy is an economy where the allocation of resources is determined only by their supply and the demand for them.
All the economic systems are based on different philosophical stand than others. These differences are caused by the different responses that each economy has to the problem of scarcity. However, economies don’t always work and take some components from each system to develop an economy that works. however economies are graded as being free market economies or planned economies using a tool called the economic spectrum, where the planned economies are placed on the left and the free market economies on the right.
