ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A mixed economic system is a system that combines aspects of both capitalism and socialism. A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.

Detailed explanation-2: -A mixed economy is partly run by the government and partly as a free market economy, which is an economic system that includes no government intervention and is mainly driven by the law of supply and demand.

Detailed explanation-3: -In a mixed economic system, the private sector and public sector co-exist. There is a certain level of economic freedom so that the private sector can decide the use of capital and seek profits. It simultaneously allows the government to intervene in some economic activities and industries.

Detailed explanation-4: -In market economy, the economy is a free market economy with no interference from the Government. The prices of the commodities in this economy are fixed on the basis of free forces of demand and supply in the market.

Detailed explanation-5: -However, in a mixed economy, the government is responsible for making and implementing various regulatory measures. The regulatory measures used in a mixed economy restrict the working of the free market mechanism. This is because of the reason that these measures limit the functioning of market forces in an economy.