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Planned Economy

A planned economy is an economic system in which decisions about the production, allocation and consumption of goods and services is planned ahead of time, in either a centralized or decentralized fashion. Since most known planned economies rely on plans implemented by the way of command, they have become widely known as command economies.The government takes the initiative and set the goals and targets to be followed by the market forces. The state intervention is limited to formulation of plan and adoption of indirect controls. The private sector becomes partner in the formulation of a plan and responsible for its implementation.