Mixed Economy
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No country is either a Command Economy or a Market Economy. They are all a mixed economy and have a joint sector so they include features of both the private sector (Market Economy) and the public sector (Command Economy) but they each have a higher level of either of the sectors. It looks after the needs of the people as well as giving them the freedom to buy what they want.
Small plots of land are allowed to be privately owned but not to the extent that the gap between the poor and the rich is huge.
Firms are given some freedom to decide what and how to produce and the prices of some commodities are decided according to the price mechanism, namely the commodities which people want but which are not essential for survival. However, the government fixes the prices of goods, which people need and that are basic to life. People are free to spend their incomes as they wish.
The government provides goods and services which cannot be provided by the private sector because they are too expensive and need to. It can control and regulate the private sector. There are some public goods provides in mixed economies such as roads, hospitals etc.
The Mixed Economy is preferred over the Command Economy and Market Economy because it looks after the needs of the people as well as giving them enough freedom to make most decisions for themselves. It more balanced and fair compared to the two other economies. Unlike the Market Economy, it is not too selfish and self-oriented and unlike the Command Economy, it is not too controlling and gives people a certain amount of freedom. This makes more people satisfied and content. A large proportion of the population is satisfied compared to a small number of people.
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by: Admin
Total views: 1005
Word Count: 409
Date: Sun, 21 May 2006 Time: 12:00 AM
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