Since the fall of communism in the 1990 s, countries in...

Name: Problem 8, Chapter 2: Economics: Concepts and Choices
Uploaded: 2021-03-28T16:53:42-08:00
Duration: 1 min 46 s
Channel: Kaylee Mcclellan
Description: Since the fall of communism in the 1990 s, countries in Eastern Europe and the former Soviet Union have abandoned command economies in favor of market economies. How do you think economic life in these countries has changed?

Since the fall of communism in the 1990 s, countries in Eastern Europe and the former Soviet Union have abandoned command economies in favor of market economies. How do you think economic life in these countries has changed?

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Key Concepts

Command Economy

A command economy is an economic system where the government centrally plans and directs economic activity, including production, investment, prices, and incomes. This system often limits market dynamics and can result in inefficiencies due to the lack of competition and incentives.

Market Economy

A market economy is an economic system that relies on supply and demand forces to determine production, prices, and distribution of goods and services. It encourages competition, innovation, and efficiency, with a limited role for government intervention.

Economic Transition

Economic transition refers to the process of shifting from a centrally planned, command economy to a market-based system. This process typically involves significant structural reforms including deregulation, establishing legal frameworks for private property, and introducing competitive markets.

Privatization

Privatization is the transfer of ownership of enterprises from the public sector to private individuals or companies. This process is a key component of moving from a command economy to a market economy, as it aims to boost efficiency and stimulate economic growth through competitive practices.

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