How is the question of what goods and services will be produced determined under a custom based system and a planned economic system?

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2026-07-25 09:30

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In a custom-based economic system, the production of goods and services is determined by traditional practices and cultural norms, often relying on historical methods and local needs. In contrast, a planned economic system relies on central authorities, such as government agencies, to make decisions about production based on set goals, resource allocation, and societal needs. While custom-based systems prioritize community traditions, planned systems focus on systematic control and coordination of economic activities.

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