command economy
A command economy is a system where the government, rather than the free market, determines what goods should be produced, how much should be produced, and the price at which the goods are offered for sale. It also determines investments and incomes.
What kind of economy does South Korea have?
mixed economic system
South Korea has a mixed economic system which includes a variety of private freedom, combined with centralized economic planning and government regulation. South Korea is a member of the Asia-Pacific Economic Cooperation (APEC) and the Asia-Pacific Trade Agreement (APTA).
What is the role of the government as a producer?
The Government as a Producer: A government may produce products which it believes are of national importance or the products that are produced by a natural monopoly, or those which it thinks are essential and hence should be available to all. Also, it may produce those commodities which the private sector may under-produce or not produce.
How does the government decide what to provide?
The government has to decide what goods and services to provide and how much of each to provide. As we have seen, more of one thing generally means less of another (opportunity cost), so some difficult decisions arise here. The private sector also has to decide what to produce, but this will tend to be decided by the market.
How does the government produce goods and services?
Most governments produce at least some goods and services that they think are essential. In some countries, governments provide affordable housing to rent. Besides housing, education and health care are also seen as essential services and some governments produce them and provide them to people free of cost or at subsidized prices.
How are the means of production in a market economy?
The means of production are privately owned by sellers, who try to produce things as cheaply and efficiently as possible in order to make a profit (meaning that they sell an item for more than it cost to produce). In its purest form a market economy should function without any government intervention.
