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... With reference to this question, besides the centrally planned economy introducing elements of the market mechanism, the market economy also adopted some elements of the planned economy. In this way, one cannot really deduce which economic system is more superior but one has to agree that a mixed economic system will be superior to both centrally planned and market economy.
In the central planned economy, the resource allocation is depended on the state priority. ...
On the other hand, for the market economy or laissez-faire, the allocation of resources is through the use of the price mechanism. ...
With the government intervening in the resource allocation, high growth rates can be achieved in the central planned economy. The externalities will also be taken into consideration by the government and therefore generates more wealth. ...
The security of living standards in a free market economy might not be safe as there will be instability due to changing market conditions. ...
In the free market economy, the resources allocated for the future may not be enough to contribute to the growth of the economy in the future. ... Taking a peek back when America, a predominantly free market economy country, suffered from the great depression.
Approximate Word count = 994
Approximate Pages = 4
(250 words per page double spaced)
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