Question

Explain The Main Merits And Demerits Of Mixed Economy.

Answer 1

The mixed economy is an economic system in which both the state and private sector direct the economy, reflecting characteristics of both market economies and planned economies.

There are several merits and demerits of the mixed economy; some are given below:

Merits Of Mixed Economy

• It encourages Private Sector
• There is an economic development
• There is both economical and occupational freedom
• The main priority is given to social welfare through effective economic and planning.
• Due to competition between both private and public sectors, the level of efficiency remains high.

Demerits Of Mixed Economy

• They tend to lean more toward government control and less toward individual freedoms.

• In Mixed Economy, the lack of price control management can cause shortages in goods and result in a recession.

• In Mixed Economic, the government decides the amount of tax on products, leading to people complaining about high taxes and their unwillingness to pay them.

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