Preview

Market Economy and Planned Economy

Powerful Essays
Open Document
Open Document
2975 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Market Economy and Planned Economy
Essay Assignment

Introduction
From1760s to 1830s, UK originally completed the industrial revolution and achieved the large-scale production of the machines. And then other European countries followed the UK and finished the industrial revolution. All these greatly promoted the development of the market economy in Europe. From the ending of the 19th century, the major capitalist countries in Europe and the United States had successively entered the stage of monopoly capitalism from the unrestricted competition of the capitalist stage. In order to get more resources, some capitalist countries started twice world wars. After the world war two, United Stated became the most powerful country in the world. And the market economy began to be developed in the all world.
At the same time, the planned economy, a completely opposite economic system, had been developed in some socialist countries such as Soviet Union, Cuba and China. Over a period of time, the planned economy showed its persuasive power in these after-war countries and made significant contributions to the economic development of these countries. But after the disintegration of the Soviet Union, the planned economy began to disappear in the world, and there are only two countries in the world who implement the planned economy. In the capitalist world, many countries began to realize that the market economy was not a panacea after the Great Depression of America in 1930s. In today 's world, there are no countries that use the pure market economy as its monetary system, and the mixed economy is more popular. In this task, we have to discuss the advantages and disadvantages of the market economy and explore one question: is the market mechanism better than the planned economy as a means of allocating scarce resources?
What is the market economy?
According to Chris and Demand (2010), a market economy, as known as capitalism or a free enterprise system, is an economic mechanism in where goods and



References: Joseph, C. & Media, D (2011). Features of the Market Economic System. Houston Chronicle. Retrieved 27,10,2012, from http://smallbusiness.chron.com/features-market-economic-system-3887.html World Economic Outlook Database, October 2012. International Monetary Fund. Accessed on October 10, 2012. Norton, M, I. & Ariely, D (14.11.2010). The gap between rich and poor in America is bigger than people think. Los Angeles Times. 2010 Alec Nove. (1987). Planned economy. The New Palgrave: A Dictionary of Economics, v. 3, pp. 879–80. Martin, M. & Drahokoupil, J. (2010). Transition Economies: Political Economy in Russia, Eastern Europe, and Central Asia. Hoboken, New Jersey: Wiley. ISBN 978-0-470-59619-7. Gallo, A, E. (1999). America’s Eating Habits: Changes and Consequences. U.S. Dept. of Agriculture, Economic Research Service (1999). Kouwenhoven, R. (1996). A Comparison of Soviet and US Industrial Performance: 1929-90. Groningen Growth and Development Centre Research Memorandum GD-29 May 1996 1997.

You May Also Find These Documents Helpful

  • Satisfactory Essays

    Russia Review Sheet

    • 329 Words
    • 2 Pages

    Market Economy: an economy that relies chiefly on market forces to allocate goods and resources and to determine prices…

    • 329 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    2. In the lesson you learned that a market economy is where the prices of services and goods are determined through a free system. Tell what you think an advantage and disadvantage is of this type of economy.…

    • 898 Words
    • 3 Pages
    Satisfactory Essays
  • Good Essays

    section 1 study quesions

    • 650 Words
    • 3 Pages

    A market economy is an economic system that is regulated by the interactions between producers and consumers in the market.…

    • 650 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    Study Questions 1

    • 440 Words
    • 2 Pages

    1. What is a market economy? (0.5 points) An economy that relies chiefly on market forces to allocate goods and resources and to determine prices.…

    • 440 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    Rep Economics Quiz

    • 754 Words
    • 4 Pages

    18. Economies transition the process by which a nation changes its fundamental economic organization and creates new free-market institutions.…

    • 754 Words
    • 4 Pages
    Good Essays
  • Good Essays

    Lsn Hsa Study Guide

    • 2993 Words
    • 12 Pages

    Market Economy - a system in which individuals and private business own and control production (also called capitalism)…

    • 2993 Words
    • 12 Pages
    Good Essays
  • Satisfactory Essays

    Thinking back on the information you have learned in this unit about different types of economic systems, imagine that you are moving from the United States (which has a mixed economy) to a country that has a largely centrally planned (or command) economy. Then in a short essay of at least two paragraphs, explain how your life will change (economically and otherwise) as you begin to live in your new home and country.…

    • 257 Words
    • 1 Page
    Satisfactory Essays
  • Satisfactory Essays

    ECO/561

    • 297 Words
    • 2 Pages

    In a market system, competition is the driving force or the mechanism of control in the market economy. This allows firms to seek alternative technique and use the lowest-cost of production to produce goods and services. On the other hand, command system is like a one way street where the government is the central planner. It does not create room for products improvement, limited goods are produced, and no competition. The market system allows the invisible hand to coordinate the resources of household and business. Another interesting concept is the Circular Flow Model of the dynamics of market economy. This model explains how resources flow from households to businesses through the resources market, and how businesses sell products to households through the product market. In addition, monetary flows or a real flow is counterclockwise of the circular flow model where households receive income or wages from businesses through the resource market, and in return, businesses input their expenditures into producing goods or services and receive revenue from households through products market (McConnell, Brue & Flynn, 2009).…

    • 297 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Notes on personal finance

    • 501 Words
    • 3 Pages

    1. What is a market economy? (0.5 points) A market economy is an economy based on the power of division of labor in which the prices of goods and services are determined in a free price system set by supply and demand.…

    • 501 Words
    • 3 Pages
    Satisfactory Essays
  • Best Essays

    Markets are what drive the global economy skyward; as they create an environment for wants and needs. To define the word market by relating it to economics, simply it means “the demand for a particular commodity or service.” (Oxford Dictionaries, 2010) Now, being able to fulfil ones wants and needs stems from the idea of creating a market equilibrium of supply and demand in a certain economy. More specifically on a micro-economic level, this constantly changing equilibrium can be shown with the Canadian housing market. Canada is a leader in world economic growth, ranking 2nd in the entire world (Encyclopedia Americana, 2010). That being…

    • 3698 Words
    • 15 Pages
    Best Essays
  • Satisfactory Essays

    Discussion Question 1

    • 328 Words
    • 2 Pages

    Explain how the market economic system works to answer the fundamental economic questions. Explain how this may differ from a command economic system. Historically, which has worked best and why?…

    • 328 Words
    • 2 Pages
    Satisfactory Essays
  • Satisfactory Essays

    Aice Economics

    • 301 Words
    • 2 Pages

    A market economy is an economy in which decisions regarding investment, production and distribution are based on supply and demand,[1] and the prices of goods and services are determined in a free price system. Competition between different firms leads to increased efficiency, as firms do whatever is necessary—including laying off workers—to lower their costs;…

    • 301 Words
    • 2 Pages
    Satisfactory Essays
  • Good Essays

    business q@a

    • 728 Words
    • 3 Pages

    A free market is a market economy in which the forces of supply and demand are not controlled by a government. A free market contrasts with a controlled market, where government intervenes in supply and demand through non-market methods such as laws controlling who is allowed to enter the…

    • 728 Words
    • 3 Pages
    Good Essays
  • Satisfactory Essays

    The Planned Economy which is the economy that the government "organises" is very different from the Free Market Economy where the private sector is in charge and owns firms etc...…

    • 315 Words
    • 1 Page
    Satisfactory Essays