Central Economic Planning

Central economic planning is a system where the government makes major decisions about what to produce, how much to produce, and for whom. Instead of relying on markets and individual choices, a central authority sets production goals, allocates resources, and controls prices. This approach aims to coordinate economic activity to achieve specific national objectives, such as full employment or industrial development. While it can ensure uniformity and focus on long-term priorities, it can also reduce individual economic freedom and efficiency, often leading to challenges like shortages or surpluses if plans are not accurately crafted.