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Distinguish between economic planning in socialist versus capitalist economic systems





KEY POINTS
• A planned economy is a type of economy consisting of a mixture of public ownership of the means of production and the coordination of production and distribution through state planning.
• Socialism has many variations, depending on the level of planning versus market power, the organization of management, and the role of the state.
• In a socialist system, production is geared towards satisfying economic demands and human needs. Distribution of this output is based on individual contribution.

• planned economy
An economic system in which government directly manages supply and demand for goods and services by controlling production, prices, and distribution in accordance with a long-term design and schedule of objectives.
• socialism
Any of various economic and political philosophies that support social equality, collective decision-making, distribution of income based on contribution and public ownership of productive capital and natural resources, as advocated by socialists.