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ECONOMIC SYSTEMS, . (The government decides what to produce, how much, and…
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The government decides what to produce, how much, and at what price.
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o Based on Karl Marx's ideas from The Communist Manifesto (1848).o Further developed in Das Kapital (1867) by Marx and Friedrich Engels,
criticising the low wages in a market economy.o The most extreme form of a planned economy is communism.
Examples of Countries: China, Cuba, North Korea, Russia, Vietnam
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o Developed by Adam Smith, a Scottish philosopher, in The Wealth of Nations (1776).
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Examples of Countries: USA, Canada, United Kingdom, Germany, Australia, New Zealand
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Profits belong to the owners, and the government has minimal involvement.
A planned economy is where the government owns and controls all resources, businesses, and production.
A market economy is where individuals and businesses own resources and make decisions on what to produce and sell.