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It is because both the private sector and public sector have a say in answering the basic economic questions, thus there will be a degree of high efficiancy (due to the private sector involvement) and social welfare too (due to the public sector involvement).
It allows the Government to intervene when the economy faces market failure. The mixed economic system allows markets to operate freely until it fails to allocate resources efficiently, after this, the government agencies, such as the EU Competition Commission, are able to correct for these failures. If this had been a completely free economic system, Government agencies wouldn't have the means of power to be able to intervene. Furthermore, if it was a centrally planned economic system (communist systems), the Government wouldn't have any drivers behind the intervention which may cause government failure for the market. (Mobeen Iqbal, Bahrain)
Writes ModelCitizen:.
Government bodies are an amazingly consistent display of their failure to utilize resources efficiently. In fact because they do not face monetary profit or loss, they have no idea if what they are doing is efficient. Questions such as what is an acceptable time for people to wait for medical treatment are unable to be answered efficiently by government, and people suffer for their failures. Extreme examples include North Korea when compared to South Korea - there is no difference between the two countries except for the choice of South Korea to all more freedoms to their people. Governments create Propaganda of 'market failures' which typically can only be defined as the price being higher than in the past, so they can 'intervene' to be able to provide an excuse for their existence, and to gain power at the expense of individuals. Societies that have greater government interventions such as regulations, subsidies, taxes, etc, are much worse off economically than those with less interventions.
What else can I help you with?
What is the central economic problem that all societies have to face using the concept of opportunity cost?
What is the central economic problem
Why do all countries face the basic economic problem?
The basic economic problem is about scarcity and choice, which every society has to deal with.
What economic problem did new nation face?
They faced multiple problems...though the main ones were national debt,and the arguments over Government power balance.
How do you solve poverty as economic problem?
The government transfers money to the poor.
What economic challenge did the newly formed American federal government face?
Inflation
What economic problems did the new government face with Jefferson and hamilton?
The biggest economic problem for Alexander Hamilton and his new government was recovering from the 54 million dollar federal debt arising from the Revolution. The states owed another 25 million. Confederate paper money was worthless.
What problem did the new federal government face?
One problem that the new federal government faced was that the large population was very hard to manage. The new federal government also had problems with jobs.
Why country face an economic problem?
Because countries continuously struggle to address this very economic fact: how to effectively and efficiently manage limited resources that they have.
How are economic questions answered in a command economy?
discuss the basic economic problem?
Definition of political problem?
There a three catagories of problems: political, economic, and social. social is what is happening with the people. Economic is what is happening in the buisness field, and political problem is referring to the government! Hope this helps!
What was the economic problem for Alexander Hamilton and the new government?
The biggest economic problem for Alexander Hamilton and his new government was recovering from the 54 million dollar federal debt arising from the Revolution. The states owed another 25 million. Confederate paper money was worthless.
What water problem do nation face?
African nations face a situation of economic water scarcity, and current institutional, financial and the human capacities for managing water are lacking.
