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Why do some people believe that a mixed economic system solves basic economic problems?In: Economics [Recategorize] |
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It is because both the private sector and public sector have a say in answering the basic economic questions, thus there will be a degree of high efficiancy (due to the private sector involvement) and social welfare too (due to the public sector involvement).
It allows the Government to intervene when the economy faces market failure. The mixed economic system allows markets to operate freely until it fails to allocate resources efficiently, after this, the government agencies, such as the EU Competition Commission, are able to correct for these failures. If this had been a completely free economic system, Government agencies wouldn't have the means of power to be able to intervene. Furthermore, if it was a centrally planned economic system (communist systems), the Government wouldn't have any drivers behind the intervention which may cause government failure for the market. (Mobeen Iqbal, Bahrain)
First answer by ID3478787106. Last edit by Mobyiqbal. Contributor trust: 3 [recommend contributor]. Question popularity: 53 [recommend question]
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