Question

There is a co-ordination of restrictions and motivation in mixed economic. explain.​

Answer 1

What is a Mixed Economic System?

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. According to neoclassical theory, mixed economies are less efficient than pure free markets, but proponents of government interventions argue that the base conditions required for efficiency in free markets, such as equal information and rational market participants, cannot be achieved in practical application.

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Answer 2

Explanation:

Mixed economy neither gives full freedom to producers nor does it keep full control over them. In a mixed economy, the entrepreneur is free to decide what to produce, how to produce, where to distribute, etc. Due to these freedoms, he is motivated to produce goods of his own choice and with best features. Thus, he can provide society with better products as per the needs. On the other hand, the government involves itself in the market to see that goods are produced with appropriate quality standards so that the customers are not exploited.

The government takes steps to control evil of monopoly, public distribution system and helps people buy unadulterated goods. Moreover, government also restricts the producers from producing certain types of goods which are harmful for the social welfare. Thus, the mixed economy runs with co-ordination of restrictions and motivations.