Question

Mixed Economy refers to

• A. Coexistence of small and large industries
• B. Coexistence of agriculture and industry
• C. Coexistence of public and private sector
• D. Coexistence of domestic and foreign enterprises

Answer 1

The Correct Option is C

A mixed economy is an economic system that blends elements of both capitalism and socialism, aiming to balance the efficiency of the market with the social welfare benefits of public ownership. The correct understanding of a mixed economy is as a system where both the public sector (government-managed enterprises) and the private sector (individually-managed businesses) coexist. This framework allows for private businesses to function alongside public services, providing a combination of free markets and government intervention.

Let us evaluate the options given:

1. Coexistence of small and large industries: Although this refers to industries of various scales coexisting, it does not capture the essence of a mixed economy, which is more about ownership types (public vs. private) rather than the size of industries.
2. Coexistence of agriculture and industry: This refers to the coexistence of different sectors, but it does not define a mixed economy, as a mixed economy may involve these sectors being either public or private.
3. Coexistence of public and private sector: This is the correct description of a mixed economy. It highlights the key feature of mixed economies where both government-run (public) and privately owned businesses (private sector) operate in the economy.
4. Coexistence of domestic and foreign enterprises: While this describes a part of globalization, it does not specifically pertain to the structure of a mixed economy.

Therefore, the correct answer is that a mixed economy refers to the coexistence of public and private sector.

The combination of these sectors allows for a versatile economic structure where resources can be efficiently allocated through market forces, but the government is also able to intervene to provide public goods and ensure economic welfare, stability, and equitable distribution when necessary.