A mixed economy is comprised of private and publicly owned businesses that are regulated by governmental organizations. In mixed economies, such as the United States, the government is responsible for using laws to control or break up business monopolies.Continue Reading
Governments regulate mixed economies by formulating rules and regulations to protect the producers and consumers in the market. Regulation also serves as a means of ensuring that mixed economies utilize economic resources efficiently and allocate scarce resources in a scientifically responsible manner. Governments plan the necessary production targets in private industries while protecting the defense, public utility services and heavy industries. Economic inequality is also minimized in a mixed economy because income gets redistributed through taxation and government subsidies.
Although the government does have jurisdiction over the activities that take place in a mixed economy, the amount of control the government has is comparably less than in a socialist economy, where most of, if not all of, the market is controlled by the government. Such economies rely heavily on tax revenues and are less likely to benefit from price signals or discipline imposed by market forces. It is for this reason that economists claim that mixed economies are more efficient than economies with substantial government ownership.Learn more about Economics
Market economy, planned economy and mixed economy are the three major types of economic systems that prevail across the world, states Economy Watch. Each economic system offers a different view on the role of government in the economy.Full Answer >
Mixed economies essentially create a balancing act between the private sector and government: these economies allow governments the opportunity to step in to correct market failures, but sometimes draw criticism for enabling too much governmental control. Mixed economies require participation and cooperation between the private sector (such as individual corporations and businesses) and the government. Ideally, these economies create strong, stable economies with minimal governmental interference. However, when the balance tips too far one way or the other, problems arise.Full Answer >
Debatably, there are many different pros and cons to operating business under a mixed economic model, such as balance in markets and government interference. These pros and cons are the result of having an economy comprised of privately owned and publicly owned establishments. As the name implies, a mixed economy has its appeal as a blend of capitalism and socialism.Full Answer >
Advantages of a traditional economy include knowing people's role in the economy and producing goods to help people survive; disadvantages include a lower standard of living and an increased vulnerability of all concerned. A traditional economy is one that emphasizes the beliefs and customs of each generation of people.Full Answer >