Good example- Russia
Heavily based on Demand
- Government chooses who produces and what is produced.
- 5 year plan;
Advantages;- Strong government makes sure public/merit goods are consumed at the right level.
-Government can control goods/services for the good of the country
Disadvantages;- Unable to efficiently allocate goods
-Shortages or surplus
-Minimum innovation
-Wages fixed, no choice for work
-5 year plan too long as things can change quickly.
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