(a) What is centrally planned economy?
(b) Outline any four features of a capitalist economy.
Explanation
(a) A centrally planned economy is one in which there is public ownership of the means of production and in which the decision as to what to produce, how to produce and for whom to produce are made by the government.
(b) Features of capitalist economy:
(i) There is private ownership of resources.
(ii) Production decision are taken mainly by private Individuals and organizations.
(iii) Capital is provided by private Individuals and organizations.
(iv) There is the profit motive.
(v) There is very limited government participation in economic activity.
(vi) Market forces determine allocation of resources.
(vii) There are various forms of competition.
(viii) There is greater inequality in income distribution
(ix) There is consumer sovereignty.