Mixed economies

Question 1

What is the mixed economy?

Answer 1

It is the mix of private and public (government) sectors, where resources are allocated by the price mechanism but the government intervenes to correct market failures

Question 2

What is the aim of a mixed economy?

Answer 2

It aims to achieve the best aspects for both free and command economies while avoiding their disadvantages

Question 3

What are traditional economies?

Answer 3

They are characterised by family groups, low producitivity, little specialisation, barter trade and no surplus production for investment eg: in the most underdeveloped regions of the world

Question 4

What are transition economies?

Answer 4

Economies that are in the process of moving from a command economy to a mixed/ free market economy.

Question 5

What are the charcteristics of transition economies?

Answer 5

-Markets are liberalised

-State assets are privatised

-State subsidies are removed

-It can cause short term problems such as inflation and underemployment