What Is Mixed Economy?

  • A mixed economy is a system that combines characteristics of market command and traditional economies.
  • A mixed economy has the following characteristics of a market economy.
  • First, it protects private property. Second, it allows the free market and the laws of supply and demand to determine prices. Third, it is driven by the motivation of the self-interest of individuals.
  • A mixed economy has some characteristics of a command economy in strategic areas.
  • It allows the central government to safeguard its people and its market. The government has a large role in key sectors like the military, international trade, banking and national transportation.
  • The government’s role in other areas depends on the needs of the citizens. However, it plays a vital role in the regulation and control of private sectors and other key industries, and also protects the small industries.
  • The objective of a mixed economy is to encourage healthy competition, reward innovation, but also protect and provide for the less-skilled and decrease economic inequalities.

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