Question

How do the government and private sector function in a mixed economy?

• A. The government works only as a police state, while the private sector works for social welfare of the society.
• B. Both the sectors work for profit maximisation in the economy.
• C. The government makes major economic decisions keeping social welfare in mind, while the private sector produce goods.
• D. Both the sectors work to achieve the goal of social welfare.

Answer 1

The correct option is C The government makes major economic decisions keeping social welfare in mind, while the private sector produce goods.

In a mixed economy, both public and private sectors own and produce goods and services. While private players participate in the production of goods and services, the government makes major decisions for the economy keeping social welfare in mind. This keeps a check on economic disparity.