Ch+2.3


 * Ch 2.3 notes and questions **

__** How is a Centrally Planned Economy Organized **__ __**The Former soviet union**__ __** Problems of Centrally Planned Economies **__
 * Central government rather than individual producers and consumers in markets answers the key economic questions of production and consumption
 * in a centrally planned economy, the government owns both land and capital
 * It's its own labor, by controlling where individuals work and what they are pain
 * the government decides what to produce and how much to charge
 * Socialism - a social and political philosophy based on the belief that democratic means should be used to distribute wealthy evenly throughout a society
 * Communism - characterized by a centrally planned economy with all economic and political power resting in the hands of the central government
 * Authoritarian governments exact strict obedience from the citizens and do not allow individuals freedom of judgement and action
 * In the Soviet Union the central government created large state-owned farms and collectives for most of the country' s agricultural production
 * Collectives- were large farms leased from the state to groups of peasant farmers
 * Soviet factories also were state-owned
 * Heavy industry- requires a large capital investment to produced items used in other industries
 * Central planning can be used to jump start an industry and to guarantee jobs and income


 * Questions **
 * 1) Socialism is the idea of distributing wealth across society and Communism is all power to one person, or a tyrant
 * 2) Strict obedience from the citizens and do not allow people a freedom of judgement and action
 * 3) pretty much because all the production and profit was going to the government
 * 4) low resources that are used to make their products