MGTA05H3 Lecture Notes - Lecture 3: Planned Economy, Unemployment Benefits, Economic System
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MGTA05H3 Full Course Notes
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Economics: the study of how people produce the things they need and want. Economic system: a society produces and distributes the goods and services that its people need. Who decides what needs to be produced . Who decides how goods and services and distributed . Planned economies: countries in which most of the factors of production are controlled by the state. Only the state has the power and authority necessary to feed, clothes, shelter, educate and employ the nation"s population. Only the state has a benevolent interest in the welfare of all members of society. Planned economy advantages: ministry of housing follows the nation"s best interest, ensures sufficient quantity of goods are distributed equally. It brings fairness, cohesion and prosperity to everyone. Planned economy disadvantages: cannot precisely offer the correct quantity for every household since central planners produce based on models.
