Distinguish between a planned and unplanned economy

In planned economy decisions about economic activities such as what, how, when and for who to produce are taken in advance by government or some central planning authority. while in case of unplanned economy decisions are not taken in advance rather they depend on the market forces by private individuals with limited government innervation.

Advantages of a planned economy

• it is easy to control the production of harmful commodities
• it eliminates private monopolies
• there is less income inequalities
• it eliminates social costs such as pollution
• it stabilizes the prices of goods and services
• it provides equity in job opportunities
• it provides forward and backward linkages
• it leads to socio-economic transformation