Investor Glossary-command economyInvestor Glossary-command economyInvestor Glossary-command economyInvestor Glossary-command economyInsightful stock market charts - Click here
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Command Economy

The HTML to link to this page

A command economy, also called planned economy, is directly controlled by the government. The state owns all property and controls all resources including land, labor, and capital in a command economy. Allocations of resources, supply, and price are regulated through central planning. A command economy discourages individualistic profit motives and consumeristic needs. Under such a planned system, rewards, wages, and perks are disbursed based on the social value of the service performed. Certain sectors get preferential allocation at the expense of others, which may lead to shortages in some essential goods. Absence of profit motives precludes any need for competitiveness. This acts as a disincentive in individual contribution to collective efforts. In the 20th century, the former Soviet Union was an example of a command economy. China and India used to also have have a command economy. Today, countries using a command economy are rare. Remaining examples of countries with a command economy include Cuba and North Korea.

Rate this command economy definition...

Learn about investing with the Investor Glossary Term of the Day

Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.

Popular Terms: required rate of return, ex-dividend date, Key Rate Duration, FICO score, VIX, deferred revenue, class C shares, in escrow, wholly-owned subsidiary, reverse mortgage, minority interest, option premium, risk management, LIBOR, irrevocable trust, average price per share, 144a, implied volatility, margin rate, annual return, current ratio, dividends payable, Zero Cost Collar, real GDP, limit order, EBITDA, open position, stock market close, cancelled check, retained earnings, debt service coverage, deferred tax, phantom income, command economy, APR, ex-dividend, FTSE, per diem, 1031 exchange, labor relations, inflation, stock split, covered put, 401a, diluted share, liquidity ratio, balance sheet, 1035 exchange, quality assurance

Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use