Economics Grade 9 Unit 2 Part 8 9ኛ ክፍል ኢኮኖሚክስ ትምህርት

Economics Grade 9 Unit 2 Part 8 9ኛ ክፍል ኢኮኖሚክስ ትምህርት 2.3 Economic Systems 3 Command Economy (Socialism) A command economy is also referred to as a socialist economy. the economic institutions are owned and controlled by the state and are put to use under a centralized plan. Socialism started in Russia with the outbreak of the Great October Revolution in 1917. Since then, many countries in the world, including China Vietnam, former East Germany, Poland, Hungary, Cuba, and Ethiopia, have adopted it. Several countries adopted this system after the Second World War. Nevertheless, socialism lost its acceptance and most of the former socialist countries adopted free market economies Main features of Command Economy Collective Ownership: All means of production are owned by society as a whole, There is no right to private property. Central Economic Planning : Resource allocation is done by the controlling Authority based on socio-economic goals. Strong Role of Government: Government has complete control over all economic activities. Relative Equality of Incomes: Private property does not exist in a command economy the profit motive is absent, and there are no opportunities for the accumulation of wealth. In comparison to capitalism, all these factors lead to greater equality in income distribution in income terms 4 Mixed Economy the combination of both the characteristics of capitalism and socialism: It incorporates features of both capitalist and command economies and allows private and public sectors to co-exist. Main Features of Mixed Economy 1 Co-existence of Public and Private Sectors: Public and private sectors coexist in this system. Industries of national and strategic importance, such as heavy and basic industry, defense services, power generation, etc. are set up in the public sector, consumer-goods industry and small-scale industry are developed in the private sector. 2 Economic Planning: The government uses instruments of economic planning 3 Economic Equality: Private property is allowed, but rules exist to prevent the concentration of wealth. It is the belief that people should receive the same rate of pay for a job, regardless of race, gender, or other characteristics that are not related to their ability to perform the task.