An economy is said to be centrally organized and controlled when any institution, mostly the state, makes the economic decisions related to the distribution and prices of goods and services. Mostly, a centralized economy is referred to as over regulatory but its bright side is that in centralized economies people are treated equally according to their needs. Which means poor people can also enjoy the benefits of an economic system. The major advantages of a centralized economy for poor people are:
Centrally Planned Economy
- Controlled prices: prices are controlled by the state for everyone in society. A particular business class of society does not rule the market, but the state does.
- Economic equality: In order to bring equal economic growth, the state provides equal opportunities for all. Resources can be accessed by all.
- The lower level of unemployment: In a centralized economy, you would see a lower level of unemployment rate because the state has the control and state’s goal is to provide employment opportunities to eradicate poverty.
- Equal distribution of resources: during an emergency situation, centralized economies can provide resources easily because the state becomes the only responsible institution for it. companies owned by the State can quickly avail the production to produce more items that people might need for their survival