During the Cold War which of the following countries had a command economy? Which had a
market economy?
a. Mongolia
b. South Korea
c. Taiwan
d. North Korea
To determine which countries had a command economy and which had a market economy during the Cold War, we need to understand the basic differences between the two economic systems.
1. Command Economy: In a command economy, the government has centralized control over the allocation of resources, production, and pricing decisions. State-owned enterprises play a significant role in the economy, and the government determines what goods and services are produced and how they are distributed.
2. Market Economy: In a market economy, economic decisions are primarily driven by the forces of supply and demand. Private individuals and businesses make decisions about production, consumption, and investment. Prices are determined by market forces, such as competition and consumer preferences.
Now, let's analyze each country from the list:
a. Mongolia: During the Cold War, Mongolia had a command economy. It was under the influence of the Soviet Union and followed socialist policies, with the government controlling major industries and resources.
b. South Korea: South Korea had a market economy during the Cold War. After the Korean War, South Korea adopted a capitalist economic system, promoting private ownership, free markets, and foreign investment to drive economic growth.
c. Taiwan: Like South Korea, Taiwan had a market economy during the Cold War. After the Chinese Civil War, the nationalist government fled to Taiwan and adopted market-oriented economic policies, encouraging private enterprise and foreign investment.
d. North Korea: North Korea had a command economy during the Cold War. It followed a socialist system with government control over the economy, central planning, and state-owned enterprises.
To summarize:
- Command Economy: Mongolia and North Korea
- Market Economy: South Korea and Taiwan
It's worth noting that economic systems can evolve over time, and this information specifically applies to the Cold War era.