Exam code: 0455 & 0987
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Define mixed economic system.
A mixed economic system is an economy that combines elements of both the market economy and the planned economy, with resources owned and allocated by both private individuals and the government.
What are the three fundamental economic questions every economic system must answer?
Every economic system must decide what to produce, how to produce it, and who to produce for.
True or False?
In a mixed economy, only the government owns the factors of production.
False.
In a mixed economy, both individuals and the government own the factors of production.
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Define mixed economic system.
A mixed economic system is an economy that combines elements of both the market economy and the planned economy, with resources owned and allocated by both private individuals and the government.
What are the three fundamental economic questions every economic system must answer?
Every economic system must decide what to produce, how to produce it, and who to produce for.
True or False?
In a mixed economy, only the government owns the factors of production.
False.
In a mixed economy, both individuals and the government own the factors of production.
Which countries are examples of mixed economies with less government intervention?
The United States, Japan, and Singapore are examples of mixed economies with less government intervention than countries like Norway, Germany, or China.
Define government intervention.
Government intervention refers to actions taken by a country's government to influence or regulate the economy, such as providing public goods, setting regulations, or redistributing income.
Give two reasons why governments intervene in a mixed economy.
Governments intervene to correct market failure and to promote equity. Other reasons include supporting firms, earning government revenue, and supporting poorer households.
In a mixed economy, the sector responds to consumer demand, while the provides public goods.
In a mixed economy, the private sector responds to consumer demand, while the government provides public goods.
What is one potential disadvantage of high government intervention in a mixed economy?
One potential disadvantage is government failure, where government decisions may be inefficient or influenced by politics rather than economics.
True or False?
Public sector organisations are always more efficient than the private sector in a mixed economy.
False.
Public sector organisations may lack profit incentives and can become wasteful or slow to respond to change.
How do mixed economies help to reduce inequality?
Mixed economies help reduce inequality by allowing the government to redistribute income through taxation and welfare to protect vulnerable groups.