Answer to Question #64903 in Economics for abbie

Question

The united states is plotted on the continuum above indicating the nation's approximate position as a mixed but mostly free market economy. Assume policy changes in the USA and the country moves to the right a little. What benefits would the country gain by such a move? What problems would it face with such a move?

Answer 1

Once USA moves to the planned economy due to policy changes, it can obtain both some advantages and disadvantages.

Advantages:
- Decreases the chances of monopoly;
- Can help in regulating the gap between poor and rich.

Disadvantages:
- Destroys entrepreneurship and innovation;
- Can result in breaking the rights of human beings;
- Problem of bureaucracy and delay of decisions is brought onto surface.