A mixed economy combines elements of market economies with elements of planned economies. It allows private ownership and control over capital and the means of production, but also a role for government intervention. Mixed economies aim to balance efficiency and equity by having both public and private sector participation. Examples of mixed economies include countries like the United States, Japan, and many Western European nations.

1. MIXED
ECONOMY

2. A PREVIEW:

3. “Mixed economy is that economy in which both
government and private individuals exercise economic
control.”
~Murad

4. “Mixed economy is that economy in which both
public and private sectors cooperate.”
~Prof. Samuelson

5. MIXED
ECONOMY a system that combines
characteristics of market,
command and traditional
economies.

6. Mixed
Economy
Market
Economy
Protects private property
Allows the free market and laws of supply and
demand to determine prices
Driven by motivation of self-interest of individuals
Command
Economy
allows the government to safeguard its people and
its market
large role in the military, international trade and
national transportation.
government’s role in other areas depends upon the
priorities of the citizens
Traditional
Economy

8. A
D
V
A
N
T
A
G
E
S
O
F
M
I
X
E
D
E
C
O
N
O
M
Y

9. ADVANTAGES
❶ Equal Distribution of
Control

10. ADVANTAGES ❷ More Efficiency for
Private Firms

11. ADVANTAGES
❸ Freedom for Private
Enterprise to Thrive On
Their Own

12. ADVANTAGES
❹ A Defined Role for the
Government as Referee

13. ADVANTAGES
❺ Safe Haven from Poverty

14. ADVANTAGES
❻ Greater Chance for the
Government to
Implement Good Policies

15. ADVANTAGES
❼ More Job Investments
Coming In

16. D
I
S
A
D
V
A
N
T
A
G
E
S
O
F
M
I
X
E
D
E
C
O
N
O
M
Y

17. DISADVANTAGES
❶ Challenge of Finding a
Balance

18. DISADVANTAGES ❷ Government Going Too
Far

19. DISADVANTAGES
❸ Excessive Intervention by
the Government

20. DISADVANTAGES
❹ Limited Corporate Size

21. DISADVANTAGES
❺ Higher Taxes

22. T
Y
P
E
S
O
F
M
I
X
E
D
E
C
O
N
O
M
Y

23. • ownership of various factors of production remains under
private control.
• main responsibility of the government in this system is to
ensure rapid economic growth without allowing
concentration of economic power in the few hands.
Capitalistic
Mixed
• means of production are in the hands of state.
• whenever and wherever demand is necessary,
government takes actions so that basic idea of economic
growth is not hampered
Socialistic
Mixed
Economy

24. Socialistic Mixed Economy
• the government interferes to bring about timely
changes in market forces so that the pace of
rapid economic growth remains uninterrupted
Liberal
Socialistic
Mixed Economy
• major decisions are taken by central agency
according to the needs of the economy.
Centralised
Socialistic
Mixed Economy

25. Mixed Economy
Capitalistic
Mixed Economy
Socialistic Mixed
Economy
Liberal Socialistic
Mixed Economy
Centralized
Socialistic Mixed
Economy

26. F
E
A
T
U
R
E
S
O
F
M
I
X
E
D
E
C
O
N
O
M
Y

27. FEATURES
❶ Co-existence of Private and
Public Sector

28. FEATURES
❷ Personal Freedom
People
•Full Freedom
of Occupation
Government
• Regulates
prices in public
interest
through public
distribution
system

29. FEATURES
❸ Private Property is
allowed

30. FEATURES
❹ Economic Planning

31. FEATURES
❺ Price Mechanism and
Controlled Price

32. FEATURES
❻ Profit Motive and Social
Welfare

33. FEATURES
❼ Check on Economic
Inequalities

34. FEATURES
❽ Control of Monopoly
Power

37. BEST
PRACTICE
❶ It encourages
innovation.

38. • it can distribute goods and services to where
they are most needed.
• It allows prices to measure supply and demand.
• It rewards the most efficient producers with
the highest profit
• It automatically allocates capital to the most
innovative and efficient producers.
• A mixed economy also minimizes the
disadvantages of a market economy.
• The expanded governmental role makes sure
less competitive members receive care.
In
encouraging
innovation:

39. WORST
PRACTICE
❶ It can take all the
disadvantages of the
other types of economies.

40. • it can leave the less competitive members of society
without any government support.
If the country
has too much
freedom:
• The defense industry could become a
government-subsidized monopoly or oligarchy
system.
• . Successful businesses can lobby the
government for more subsidies and tax breaks.
• The government could protect the free market
so much that it doesn’t regulate enough.
If there is
central
planning:

41. EXAMPLE
The United States of
America

42. United States of America
US Constitution protects ownership of private property and
limits government interference in business operations.
Constitution also protects the rights
of groups to practice their
customary beliefs.
The Constitution encourages the
government to promote general
welfare.

43. MIXED
ECONOMY
AND
GLOBALIZATION
❶ When a country encourages
its businesses to export, it
gives up some control.
❷ The free market is the basis
for the global economy.

44. M
O
D
E
L
C
O
U
N
T
R
I
E
S

45. Iceland
57% Government Spending (GDP)

46. Sweden
52% Government Spending (GDP)

47. Russia
34.1% Government Spending (GDP)

48. Japan
37.1% Government Spending (GDP)