government authorities makes key decisions in a centrally planned economy.
government authorities makes key decisions in a centrally planned economy.
who makes key decisions in a centrally planned economy?
government authorities
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a centrally planned economy combines public ownership of the means of production with centralised state planning. this model is usually associated with the soviet-style command economy. in a centrally planned economy, decisions regarding the quantity of goods and services to be produced are planned in advance by a planning agency. in the early years of soviet central planning, the planning process was based upon a selected number of physical flows with inputs mobilized to meet explicit production targets measured in natural or technical units. this material balances method of achieving plan coherence was later complemented and replaced by value planning, with money provided to enterprises so that they could recruit labour and procure materials and intermediate production goods and services. the soviet economy was brought to balance by the interlocking of three sets of calculation, namely the setting up of a model incorporating balances of production, manpower and finance. the exercise was undertaken annually and involved a process of iteration (the "method of successive approximation"). although nominally a "centrally planned" economy, in reality formulation of the plan took place on a more local level of the production process as information was relayed from enterprises to planning ministries. aside from the ussr and eastern bloc economies, this economic model was also utilized by the people's republic of china, socialist republic of vietnam, republic of cuba and north korea.
socialist economics