The Economic Problem Essay/Romania

Topics: Economics, Economic system, Market economy Pages: 2 (851 words) Published: April 19, 2013
The Economic Problem Essay/Romania
Romania is a small country in southeast Europe. After the Russo-Tunkin War of 1828-1829, they become Russian protectorates. Then nation became a kingdom in 1881 after the congress of Berlin. Romania started to be the command economy from then. The command economy is one where basic economic decisions are made by government on behalf of the people. Resources are owned in command by the people and allocated by the government. Therefore the central government answers the three basic economic questions; what to produce, how to produce and what to produce for. Central planner decided about what to produce, how to produce may vary according to political agenda, the products are make for the people who is most in need. At the start of World War Ⅰ. Romania proclaimed its neutrality but it still was invaded, about 270,000 Jews were massacred in Fascist Romania. People were not satisfied the country so it lead to the economic problem: unlimited wants + limited resources = scarcity. Then king Carol Ⅱ dissolved parliament, granted the new prime minister, Lon Antonescu, full power, abdicated his throne, and went into exile. So the country started to be controlled by the prime minister, and the economy went back to the traditional economy from the command economy. With time passing by, Romania has experienced many armies and in 1995 Romania joined the Warsaw Treaty Organization and the United Nations. This national objective may help it’s economy change in some ways. Romania has been very well in these years. Their economy has a large increase and the citizens lived comfortable than before. During 1967 to 1989, Nicolae Ceausescu turned the country from a moderately prosperous into one at the brink of starvation. He uses $10 billion to pay his own debt. From this we can see the economic problem about opportunity cost. He forgoes the better life and better future of Romania. Then from 1995 the post-communist governments’ conflicted...
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