Definition, Meaning & Synonyms

centralized economy

noun

/ˈsɛn.trə.lʌɪzd ˈiː.kə.nə.mi/

Definition

A centralized economy refers to an economic system in which the decisions regarding production, investment, prices, and incomes are predominantly made by a central authority, often the government.

Examples

In a centralized economy, the government sets prices for essential goods.
Countries with a centralized economy often focus on public welfare and equitable distribution of resources.
The centralized economy helped stabilize the nation during times of crisis by providing uniform resources.

Meaning

In a centralized economy, the government typically controls and directs economic activity, which can lead to uniformity in production and distribution. This contrasts with a market economy, where such decisions are made by individuals and businesses based on supply and demand.