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In a command economy, the central government decides what goods and services will be produced, what wages will be paid to workers, what jobs the workers do, as ...
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In this type of economic system, what is produced is based on custom and the habit of how such decisions were made in the past. The methods of production are primitive. Bartering, or a system of trading in goods and services, replaces currency in a traditional economy. The primary group for whom goods and services are produced in a traditional economy is the tribe or family group. In a command economy, the central government decides what goods and services will be produced, what wages will be paid to workers, what jobs the workers do, as well as the prices of goods.
In a command economy, the government determines how the goods and services are distributed. In a command economy, no one can start their own business. The government determines how and where the goods produced would be sold. In a market economy, the wants of the consumers and the profit motive of the producers will decide what will be produced. A.K.A. Free-enterprise, Laisse- faire & capitalism. Labor (the workers) and management (the bosses/owners) together will determine how goods will be produced in a market economy. In a market economy, each production resource is paid based on what is contributed to the production of goods and services. Nearly all economies in the world today have characteristics of both market and command economic systems. This means that most countries have characteristics of a free market/free enterprise as well as some government planning and control.