A centralized economy is an economic system where the government or a central authority makes all the decisions regarding the production, distribution, and pricing of goods and services. This means that the state controls resources and determines what is produced, how much is produced, and who receives the products. In a centralized economy, individual businesses have limited freedom to operate independently. This system is often associated with socialism or communism, where the goal is to achieve equality and eliminate competition. However, critics argue that it can lead to inefficiencies and a lack of innovation due to the absence of market forces.