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postnew [5]
3 years ago
5

How did their previous status as colonies of European powers have an effect on the development of many less developed countries?

History
1 answer:
Trava [24]3 years ago
7 0

Answer:

When they became independent, LDC's relied on central planning rather than free enterprise to modernize their economies.

Explanation:

Centralized Economy is an economic system whose production is controlled by the State, which defines the planning and goals of the country's economy, it is the model proposed by Socialism.  Its objective is to supply the market and guarantee the social needs of the population, which is done through the economic prosperity of the State.

The State studies the need for production so that only what is necessary is produced.

He defines how much he wants to invest and distributes raw materials to producers. The definition of prices is also part of this set of competencies that are the responsibility of the State.  Taking into account these financial planning, there is a reduction in unemployment, which contributes to ensuring that the basic needs of the population are met.

It is the opposite of the Market Economy.

The main characteristics of the planned economy are:

  • the predominance of state-owned companies
  • no business competition
  • the disadvantage of dynamizing companies and, therefore, lack of innovation
  • opposes the economic model of the market economy
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