ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Mixed economic systems are not laissez-faire systems, because the government is involved in planning the use of some resources and can exert control over businesses in the private sector. Governments may seek to redistribute wealth by taxing the private sector and by using funds from taxes to promote social objectives.

Detailed explanation-2: -In a mixed economy both market forces and government decisions determine which goods and services are produced and how they are distributed. In general, market forces prevail in mixed economies.

Detailed explanation-3: -Mixed economies may also have a distinct public sector, where resources are allocated mainly by government, such as defence, police, and fire services. In many sectors, resources are allocated by a combination of markets and panning, such as healthcare and, which have both public and private provision.

Detailed explanation-4: -Whenever government interferes in market prices, catallaxy is distorted, causing misallocations of resources and deadweight losses. Despite their best intentions, mixed economies are a burden on the price mechanism.