Centrally Planned Economies

In centrally planned economies the government tries to harmonize the activities of the different economic sectors. In the extreme form of central command, goals are set for every enterprise in the country and must be followed. The government determines how much is produced, by whom and for whom.

At the heart of a centrally planned economy is its blueprint, generally a five-year plan. Based on this overall plan, special targets are set each year for each sector of economy.

Mixed Economies

By definition, no economy is purely market determined or centrally planned. The United States and the former Soviet Union represent different ends of the spectrum of mixed economies. In practice, however, mixed economies generally have a higher degree of government intervention than is found in the United States and a greater degree of reliance on market forces than is found in the former Soviet Union. Government intervention can be regarded in two ways: actual government ownership of means of production and government influence in economic decision making (J. D. Daniels, L. H. Radebaugh. International Business. Environment and Operations. N. Y.: Addison-Wesley Publishing Co., 1989).

Vocabulary list:

to define — определять, давать определение;

definition — определение;

mixed — смешанный;

allocation — размещение, распределение;

allocation of resources — распределение ресурсов;

property — собственность;

ownership — владение, собственность, право собственности;

private — частный;

public — государственный;

postal service — почтовая служба;

utilities — коммунальные службы;

to consume — потреблять;

supply — предложение;

demand — спрос;

adequate — соответствующий;

to purchase — приобретать;

gap — пропасть, разрыв;

to evolve — возникать;

fringe benefits — дополнительные льготы;

Text 2. Government's Role in the Economy

While consumers and producers obviously make most decisions that mould the economy, government's activities have at least four powerful effects on the US economy.

Direct services

Each level of government provides direct services. The postal system, for example, is a federal system serving the nation, as is the large military establishment. By contrast, the public education systems are primarily paid for bystate, county or city governments.