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The economy was directed by the government rather than by decentralized market mechanisms.
? Resources were mobilized to achieve economic growth .This was successful through the 1950s. But planners committed more resources than were available. So there were shortages.
? Industrialization and military strength had the highest priority in terms of resource allocation in the Soviet Union. In China emphasis was placed on developing small-scale industries scattered throughout the rural areas.
? The command economies neglected consumer goods industries.
This resulted in inefficiencies (IMF Issues Brief (2000))
? Allocative Inefficiency - Allocation of inputs was done by directive...
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