Economic System

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Characteristics:
The private sector controls some part of natural resources and the government controls the other The government plays an important role in resolving economic problems faced by society Private ownerships and governments cooperate to produce goods and resolve together fundamental economic problems The government also provides services such as education, health, military defense, legal and infrastructure to society. The government influence in determining the goods to be produced.

Advantages:
a. Provides fair competition: The presence of private enterprise ensures that there is fair competition in the market, and the quality of products and services are not compromised. Market prices are well regulated: The government with its regulatory bodies ensure that the market price do not go beyond its actual price. Optimum utilization of national resources: In a mixed economy, the resources are utilized efficiently as both government and private enterprises are utilizing them. People are given more power: The general people have more say when it comes to the quality and the prices of products and services. It does not allow monopoly at all: Barring a few sectors, a mixed economy does not allow any monopoly as both government and private enterprises enter every sector for business. Disadvantages

a. It's efficiency property reduces in progressively higher degree, the more its mixed nature embraces more and more of government / state intervention and State planning and reduces the reliance on competitive market economy management mechanisms. b. Mixed economy system has a natural tendency to move further and further away from reliance on competitive market mechanism to greater and greater bureaucratic controls and interventions until the system efficiency goes down to zero and the system breaks down or dictatorships get fairly established to hide inefficiencies and remove all economic and political freedom from the...
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