Answer to Question #317801 in Microeconomics for Teen dyy

Question

After an alien invasion, Earth has to resort to the extreme protection of its resources in order to survive. A global government is elected with the mandate to control all the resources, which remain to humanity. The global government serves as a centrally directed economic system and has assumed complete responsibility for producing and distributing products and services. Which describes the main economic system used in this new world order?

Answer 1

The economic system in this world order is called a planned or central economic system or socialism. In this system, all means of production, distribution, and exchange are held and controlled by the central government of the world to the citizens of the world according to their need. Each and everyone works towards ensuring that there is enough to go round. The problem with this system is that there begins to appear cracks in the system through mismanagement and red-tapism. Most of the times, those who need it more are neglected for those who are in the small circle of the elite. The general effect is that people are worse off than if they were working for themselves.