Mixed Economy
Introduction to mixed economy.
What Is Mixed Economy?
According to Amadoe (2015), mixed economy can be defined as “An economic system that features characteristics of both capitalism and socialism. A mixed economic system allows a level of private economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. This type of economic system is less efficient than capitalism, but more efficient than socialism.” In mixed economy private sector run most of the business and government intervene in certain areas by imposing regulations and spending on public sector.
In reference to Investopedia (2015), in mixed economy, public sector provides services like defence, power and other basic goods required and private sector is responsible for providing consumer goods, agriculture and other small scale industries. It also allows private sector to own property but government should ensure that profit and property are distributed equally.
According to Seth (2013), most of the major economies today are mixed because of globalization. To carry out international trade and serve to the needs of people it’s important for government to give some control to free market forces.
Mixed economy can be classified into two categories;
1. Capitalistic Mixed Economy
In these economy governments main obligation is to ensure rapid growth without allowing concentration of economic power in the few hands. In capitalistic mixed economy government doesn’t intervene in any manner and tenure of factors of production remains under private control.
2. Socialist Mixed Economy
In this economy factors of production remain under government control. The forces of demand and supply are used for basic economic decisions. However, whenever and wherever demand is necessary, government takes actions so that basic idea of economic growth is not hampered.
Socialist mixed economy can be divided into two parts;
a) Liberal Socialistic
What Is Mixed Economy?
According to Amadoe (2015), mixed economy can be defined as “An economic system that features characteristics of both capitalism and socialism. A mixed economic system allows a level of private economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims. This type of economic system is less efficient than capitalism, but more efficient than socialism.” In mixed economy private sector run most of the business and government intervene in certain areas by imposing regulations and spending on public sector.
In reference to Investopedia (2015), in mixed economy, public sector provides services like defence, power and other basic goods required and private sector is responsible for providing consumer goods, agriculture and other small scale industries. It also allows private sector to own property but government should ensure that profit and property are distributed equally.
According to Seth (2013), most of the major economies today are mixed because of globalization. To carry out international trade and serve to the needs of people it’s important for government to give some control to free market forces.
Mixed economy can be classified into two categories;
1. Capitalistic Mixed Economy
In these economy governments main obligation is to ensure rapid growth without allowing concentration of economic power in the few hands. In capitalistic mixed economy government doesn’t intervene in any manner and tenure of factors of production remains under private control.
2. Socialist Mixed Economy
In this economy factors of production remain under government control. The forces of demand and supply are used for basic economic decisions. However, whenever and wherever demand is necessary, government takes actions so that basic idea of economic growth is not hampered.
Socialist mixed economy can be divided into two parts;
a) Liberal Socialistic
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