Question

In a mixed economy, how does the government typically balance its role between capitalism and socialism?

1. By completely nationalizing all industries
2. By allowing the private sector to dominate while providing public services and welfare programs
3. By enforcing strict price controls and limiting individual entrepreneurship
4. By implementing a planned economy with no private ownership

• A. 1, 3
• B. 2 only
• C. None of these
• D. 1, 2

Answer 1

Answer:

B. 2 only

Mixed economy

• A mixed economy is an economic system that combines elements of both capitalism and socialism.
• In a mixed economy, both private and public ownership of businesses and resources coexist, and the government plays a role in regulating and guiding economic activity.
• This economic model aims to strike a balance between the benefits of a free-market system and the need for government intervention to address various social and economic concerns.
• Indian economy is  one of the best example of mixed economy

Balancing between capitalism and socialism 

• In a mixed economy, private enterprise and ownership of businesses are allowed and encouraged.
• This means that individuals and private companies have the freedom to own and operate businesses, produce goods and services, and engage in market competition.
• This aspect aligns with capitalist principles, where market forces largely determine prices, production, and resource allocation
• On the other hand, the government takes an active role in providing essential public services and establishing welfare programs.
• These services can include healthcare, education, transportation, social security, and more.
• The goal is to ensure that basic needs are met for all citizens, and to provide a safety net to those who may face economic hardship or inequality.
• This aspect aligns with socialist principles, where there is a focus on social equality and reducing poverty.