Mixed Economy
A mixed economy blends free market mechanisms with government intervention and control. The private sector operates through markets, but the government provides public goods, regulates market failures, and sometimes directly provides goods and services. Most modern developed economies are mixed economies.
Real World
The UK operates a mixed economy where the NHS provides healthcare funded by taxation, while private firms like Tesco and Rolls-Royce compete in markets — the government intervenes where markets alone would underprovide essential services.
Exam Focus
When evaluating mixed economies, discuss the trade-off between government correction of market failure and potential government failure.
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