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Define the planned or command economy system.
Planned or command economy:
Resources are owned through the state. The state assigns resources, and sets production goals and growth rates as per its own view of people's requirements. Income distribution is decided through the state. Prices play small or no part into informing resource allocation decisions as well as queuing rations scarce goods.
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Importance of production.
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In brief, the price of anything is based on comparative benefit. If Adam makes clocks better and cheaper than Bill, all clock production should go to Adam.
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