Upload
emerald-walton
View
223
Download
0
Tags:
Embed Size (px)
Citation preview
CENTRALLY PLANNED CENTRALLY PLANNED ECONOMIESECONOMIES
Economics Nov 7 2011
Centrally Planned Centrally Planned EconomiesEconomies
Name:Date: Nov-7-11Define 3 Key Terms (page 34)1)2)3)
Warm up Warm up
What do you think of when you hear the word communism? What does communism mean to you?
OR What do you think of when you hear the word
socialism? What does socialism mean to you?
Centrally Planned Centrally Planned EconomiesEconomies
How are centrally planned economies organized?
How did the centrally planned economy of the former Soviet Union function?
What problems exist within centrally planned economies?
Socialism is a social and political philosophy based on the belief that democratic means should be used to distribute wealth evenly throughout a society.
It is a formal economic system in which society exerts considerable control over the nation's wealth and property in the pursuit of social justice.
SocialismSocialism
Communism Communism
Communism is a political system characterized by a centrally planned economy with all economic and political power resting in the hands of the government.
It is a formal economic system in which property, particularly capital property (e.g. factories, machines, tools, etc.), is commonly owned and scarce resources are allocated through planning as opposed to price signals in a free market.
In a centrally planned economy, the government
owns both land and capital. The government
decides what to produce, how much to produce,
and how much to charge.
Organization of Centrally Organization of Centrally Planned EconomiesPlanned Economies
Capitalism SocialismCommunism
System Type
informal formal formal
Ownership
mostlyprivate
Either /Both
public
Organization
decentralized
mixed centralized
Social objectives
freedom equality equality
Economic objectives
efficiency "fairness" "fairness"
The Former Soviet UnionThe Former Soviet Union
Soviet Agriculture In the Soviet Union, the government created large state-owned farms and collectives for most
of the country’s agricultural production. Soviet Industry
Soviet planners favored heavy-industry production (such as steel and machinery), over the production of consumer goods.
Soviet Consumers Consumer goods in the Soviet Union were scarce and usually of poor quality.
Problems of a Centrally Problems of a Centrally Planned EconomyPlanned Economy
Centrally planned economies face problems of poor-quality goods, shortages, and
diminishing production.
Section 3 AssessmentSection 3 Assessment
1. In a socialist country,
(a) central planning is unnecessary.
(b) the government often owns major industries, such as utilities.
(c) an authoritarian government controls the economy.
(d) economic equality is not important.
2. Which of the following is an advantage of a centrally planned economy?
(a) the system’s bureaucracies are small and flexible
(b) the system can work quickly to accomplish specific goals
(c) innovation is well rewarded
(d) consumers’ needs are well met
Section 3 AssessmentSection 3 Assessment
1. In a socialist country,
(a) central planning is unnecessary.
(b) the government often owns major industries, such as utilities.
(c) an authoritarian government controls the economy.
(d) economic equality is not important.
2. Which of the following is an advantage of a centrally planned economy?
(a) the system’s bureaucracies are small and flexible
(b) the system can work quickly to accomplish specific goals
(c) innovation is well rewarded
(d) consumers’ needs are well met
Section 3 AssessmentSection 3 Assessment
Key Terms and Main Ideas (page 38) 1) 2) Case Study (page 39) Read and answer the 2 questions at the
bottom of page 39