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Command economy

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A command economy (often called a planned economy or centrally-planned economy) is a planned economy where the government determines production levels and sets prices. This is said by supporters to be advantageous because it prevents unscrupulous businessmen from taking advantage of the people. It is criticized - chiefly by free market advocates such as Milton Friedman - on the grounds that centralized planning has always been ineffective because it does not rely on price signals to guide production and distribution.

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