Question:
What is Centralised Planned Economy?
What is Centralised Planned Economy?
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In a centralised planned economy, the government's dominance ensures equal distribution but may limit innovation and efficiency due to lack of competition.
Updated On: Nov 5, 2025
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Solution and Explanation
A Centralised Planned Economy, also known as a command economy, is an economic system where the government has control over all aspects of economic activity. This includes the production, allocation, and distribution of goods and services. The government sets prices, determines resource use, and makes investment decisions, limiting the role of market forces. Such economies aim for social welfare and economic equality by preventing wealth concentration, but they may suffer from inefficiencies, lack of incentives for innovation, and slower economic growth.
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