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Chapter 2: Problem 62

What is meant by the term "mixed economy"? Give an example of a country that has a "mixed economy" and one that doesn't.

Short Answer

Expert verified
A mixed economy is an economic system that combines elements of both market economies (based on supply and demand) and planned economies (where the government makes economic decisions). In mixed economies, the government retains some control over certain industries and resources, but private businesses and individuals also have a significant role. One example of a country with a mixed economy is the United Kingdom. In contrast, Cuba operates under a predominantly planned economic system, making it an example of a country without a mixed economy.

Step by step solution

01

Definition of Mixed Economy

A mixed economy is an economic system that combines elements of both market economies (based on supply and demand) and planned economies (where the government makes economic decisions). In mixed economies, the government retains some control over certain industries and resources, but private businesses and individuals also have a significant role. This system allows for a balance between government intervention and individual freedom.
02

Example of a Country with a Mixed Economy

One example of a country with a mixed economy is the United Kingdom. The UK operates on a market system, in which private businesses operate independently to provide goods and services to consumers. However, the UK government also intervenes in many sectors, such as healthcare, education, and public transportation. This combination of private enterprise and government control results in a mixed economic system.
03

Example of a Country without a Mixed Economy

Cuba is an example of a country without a mixed economy, as it operates under a predominantly planned economic system. In this system, the government plays the central role in economic planning, production, and distribution of goods and services. Private enterprises have very limited operation in the Cuban economy, and most industry sectors are state-owned and controlled by the government. As such, Cuba can be considered an example of a country without a mixed economy.

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