Question

Difference between capital economy, centrally planned economy and mixed economy?

Answer 1

Capitalist Economy : Land. labor, capital and entrepreneurship are the major resources of the economy and in a capitalist economy these resources are in the hand of the private individuals without any interference from the government. However in reality it does not exist.

Centrally Planned Economy: It is a government driven economy and all the decisions are made by the government alone without any interference from the private individuals.

Mixed Economy: Government and private individuals both play a vital role in mixed economy. Businesses are privately owned as well as government owned. In case of market failure government can intervene to correct it. Nowadays most economies are mixed economies.