Economics Command Economy Questions Medium
In a command economy, the role of international trade is typically limited and controlled by the government. The government determines the types and quantities of goods and services that can be imported or exported, as well as the terms of trade.
One of the main purposes of international trade in a command economy is to acquire resources, technologies, and goods that are not readily available domestically. This allows the economy to access resources and technologies that may be necessary for development or production. Additionally, international trade can help to diversify the economy and reduce dependence on a limited range of domestic industries.
However, the government in a command economy often prioritizes self-sufficiency and domestic production over international trade. This means that the government may impose restrictions on imports to protect domestic industries and promote domestic production. These restrictions can include high tariffs, quotas, or even outright bans on certain goods and services.
Furthermore, the government may also use international trade as a means to generate revenue or obtain foreign currency reserves. By exporting goods and services, the government can earn foreign exchange, which can be used to finance imports or support other economic activities.
Overall, in a command economy, international trade plays a limited role and is heavily regulated by the government. The government's main focus is on achieving self-sufficiency, protecting domestic industries, and controlling the flow of goods and services across borders.