Mixed economy has following main features:

Author Topic: Mixed economy has following main features:  (Read 317 times)

Offline Md. Alamgir Hossan

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Mixed economy has following main features:
« on: April 13, 2017, 04:52:56 PM »
(i)   Co-existence of Private and Public Sector: Under this system there is co-existence of public and private sectors. In public sector, industries like defense, power, energy, basic industries etc., are set up. On the other hand, in private sector all the consumer goods industries, agriculture, small-scale industries are developed. The government encourages both the sectors to develop simultaneously.

(ii)   Personal Freedom: Under mixed economy, there is full freedom of choice of occupation, although consumer does not get complete liberty but at the same time government can regulate prices in public interest through public distribution system.

(iii)   Private Property is allowed: In mixed economy, private property is allowed. However, here it must be remembered that there must be equal distribution of wealth and income. It must be ensured that the profit and property may not concentrate in a few pocket

(iv)   Economic Planning: In a mixed economy, government always tries to p
romote economic development of the country. For this purpose, economic planning is adopted. Thus, economic planning is very essential under this system.


(v)   Price Mechanism and Controlled Price: Under this system, price mechanism and regulated price operate simultaneously. In consumer goods industries price mechanism is generally followed. However, at the time of big shortages or during national emergencies prices are controlled and public distribution system has to be made effective.

(vi)   Profit Motive and Social Welfare: In mixed economy system, there are both profit motive like capitalism and social welfare as in socialist economy.

(vii)   Check on Economic Inequalities: In this system, government takes several measures to reduce the gap between rich and poor through progressive taxation on income and wealth. The subsidies are given to the poor people and also job opportunities are provided to them. Other steps like concessions, old age pension, free medical facilities and free education are also taken to improve the standard of poor people. Hence, all these help to reduce economic inequalities.

(viii)   Control of Monopoly Power: Under this system, government takes huge initiatives to control monopoly practices among the private entrepreneurs through effective legislative measures. Besides, government can also fake over these services in the public interest.