What is a mixed economy?

What is a mixed economy?

• A. A system with only free enterprise
• B. A system that incorporates elements of both free enterprise and government intervention
• C. A purely government-controlled economy
• D. An economy based solely on barter

Answer: (B)

A mixed economy is defined as a system that blends characteristics of both free enterprise and government intervention. This means that within a mixed economy, both private and public sectors play significant roles in the production and distribution of goods and services. In such an economic system, the private sector is driven by individual entrepreneurship and the market forces of supply and demand. This allows for personal freedoms and the potential for profit, which can foster innovation and efficiency. At the same time, governmental intervention is present to address market failures, regulate industries, provide public goods, and ensure economic stability. The balance struck in a mixed economy allows it to harness the strengths of free market principles while also safeguarding against the potential downsides associated with unregulated markets, such as monopolies, inequality, and economic instability. By incorporating both elements, a mixed economy aims to create a more equitable society while promoting economic growth.

A mixed economy is defined as a system that blends characteristics of both free enterprise and government intervention. This means that within a mixed economy, both private and public sectors play significant roles in the production and distribution of goods and services.

In such an economic system, the private sector is driven by individual entrepreneurship and the market forces of supply and demand. This allows for personal freedoms and the potential for profit, which can foster innovation and efficiency. At the same time, governmental intervention is present to address market failures, regulate industries, provide public goods, and ensure economic stability.

The balance struck in a mixed economy allows it to harness the strengths of free market principles while also safeguarding against the potential downsides associated with unregulated markets, such as monopolies, inequality, and economic instability. By incorporating both elements, a mixed economy aims to create a more equitable society while promoting economic growth.