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MIXED ECONOMIES

MIXED ECONOMIES. In today’s world, most economies combine varying degrees of market, command, and even traditional systems. Weaknesses of the Free Market. Markets leave some needs and wants unanswered (highways) Markets don’t always let everyone participate (education) Markets can’t

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MIXED ECONOMIES

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  1. MIXED ECONOMIES • In today’s world, most economies combine varying degrees of market, command, and even traditional systems.

  2. Weaknesses of the Free Market • Markets leave some needs and wants unanswered (highways) • Markets don’t always let everyone participate (education) • Markets can’t enforce contracts or issue patents • Markets can’t protect private property rights (5th/14th Amendments)

  3. Mixed Economies Exist on a Continuum (A range with no clear divisions) • Centrally Planned economies exist on one end (North Korea, Cuba)

  4. Mixed Economies Exist on a Continuum (A range with no clear divisions) • Free market economies exist on the other end (Hong Kong, Singapore) • Mixed economies exist somewhere in between based on degree of government intervention

  5. Mixed Economies with Significant Government Intervention • Government owns some/all property and produces some/all of the goods • Imports sometimes restricted/banned • Foreign companies not completely welcome • As a centrally planned economy transitions to a market economy it privatizes (sells to individuals) firms • Examples: China, Russia

  6. Mixed Economies with Significant Market Characteristics • Limited government involvement in economy • No/few trade barriers • Open to foreign investment • Examples: Hong Kong, United States

  7. Key Features of U.S. (Mixed) Economy • Free enterprise: profit motive, open opportunity, private property rights, free contract, etc. • Government regulation: consumer/environmental protections (negative effects include higher bus. costs) • Free trade with some protectionism • Foreign investment encouraged • Banks are allowed to operate relatively independently

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