an economic system where the government has strict controls in determining the ownership of the business, earnings, and alikasi resources to achieve the goal that has been set by the government.
The characteristics of the centralized economic system:
1. The Government of the ruling on production, consumption, and distribution
2. Capital goods and factors of production belonging to government
3. Does not recognize private property rights
4. No individual / group to strive freely
The advantages of a centralized economic system is:
1. The government is to control inflation, unemployment and other economic masalh
2. Market of goods in the country running smoothly
3. The government can be involved in the formation of prices
4. Relative easily make income distribution
The disadvantage is:
1. Turn off individual initiative
2. People do not have the freedom to have the economic resources and wealth.
3. ECONOMIC SYSTEMS MARKET, is a system that everything is determined by the market.
Characteristics possessed by the market economic system is:
1. Everyone is free to have capital goods
2. Everyone shall be free to use the goods or services owned
3. Economic activities carried out by the private sector and aim to get profit
4. The government did not invest
5. Competition is conducted freely
The kindness of this system are:
1. The initiative and creativity of the community can thrive
2. Individuals are free to have production resources
3. Appears goods of high quality
4. High Efficiency and effectiveness
The disadvantage is:
1. difficult to make equitable distribution of income
2. The rich get richer, the poor getting poorer
3. There was a monopoly company
4. Frequent economic turmoil
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