What is the command economy?

command economy is an economic system that is controlled by a centralized federal government. In most examples of the command economy, the inspection of industrial goods that is produced in the country focuses. Sometimes it is referred to as a centrally planned economy, it is not unusual for the government to own and operate manufacturing facilities producing goods, or maintain a high level of control over companies that can operate in the country.

Theoretically, the concept of the command economy is to ensure that the country's population has a sufficient range of industrial products that are available at prices that are reasonable to manufacturers and good for the overall economy. The price of produced good is often also regulated by the government. This event is understood that it maintains balance in the economy, provides jobs in the industrial production sector on the labor market, and also helps maintain qualitandards set by the government. By careful control of the production rate, it is possible for the central government to remove the offer that exceedsContemporary demand in the country. As a result, the stocks of finished goods are smaller. This in turn reduces the number of products that remain on the shelf and eventually become outdated and must be destroyed or sold with a loss.

The command economy does not control the whole consumer market in the hands of the government. In general, a country that uses the concept of economic command will not be more involved in markets as agriculture than a country that works with a free business system. This means that not every type of consumer product produced in the country will be owned or strongly regulated by the central government.

The use of Command Economy is relatively rare today. One of the best examples of the command economy in the last hundred years would be the old Soviet Union. Many of them consider the structure of this command economy to be a standard for establishing and operating an economy of this type.