Economies {planned economy}| {command economy} can have central-government planning boards, which calculate and set production-unit prices, inputs, and outputs, based on value, desired distribution, and national goals. Bargaining sets output quotas. Consumers choose what to buy.
effects
Planned economies emphasize output, rather than cost. Planned economies often have poor-quality output, because they set price with little regard for cost, so managers must minimize costs.
incentives
In planned economies, incentives depend on goods produced {piece-rate}. Manual laborers and skilled workers have good pay. Service jobs pay less.
government
Government services and staple goods are free or cheap, such as housing, basic foods, medicine, and school.
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Date Modified: 2022.0224