By: Sequoia Cradic
Most of the economic decisions that are made are based on custom and on the habit of how such decisions were made in the past. The world traditions something that has been passed down in a culture from one generation to the next.
A central planning group would decide which goods and services should be produced , as well as prices for the goods and wages paid to the workers. No individual could decide to start a new business on hi or her own. The government would decide what to produce and who would own the places where the goods were produced. The government would also decide what jobs the workers would do and how and where the goods produced would be sold.
In a market economy, consumers are in charge and make economic decisions by spending money on goods and services they need/want. In a market economy, national and state governments play a minor role. Consumer and their buying decisions drive the economy. The assumptions of the market play a major role in deciding the right path for a country's economic development.