HISET Social Studies Practice

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What defines a mixed economy?

  1. A system with total government ownership

  2. A system combining private and public enterprises

  3. A system based solely on agriculture

  4. A system that discourages free trade

The correct answer is: A system combining private and public enterprises

A mixed economy is characterized by its combination of both private and public enterprises. This means that in a mixed economy, individuals and businesses can own and operate their own companies, while the government also plays a role in regulating the economy and providing certain services. This structure aims to strike a balance between the efficiency of market-driven forces and the welfare needs that government intervention can address. The other options do not accurately define a mixed economy. Total government ownership describes a command or planned economy, which contrasts with the principles of a mixed economy. A system solely based on agriculture refers to an agrarian economy, while a system that discourages free trade is typically more associated with protectionist or isolationist policies, neither of which align with the characteristics of a mixed economy.

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