A mixed economy
A)Is justified by the superiority of laissez faire over government intervention.
B)Utilizes both market and nonmarket signals to allocate goods and services.
C)Relies on the use of central planning by private firms rather than the government.
D)Is one that allows trade with other countries.

Question

Quizplus · Accepted Answer

A mixed economy combines elements of both a market economy (where goods and services are allocated based on supply and demand) and a command economy (where the government dictates the distribution of goods and services). In a mixed economy, both market signals (such as prices) and nonmarket signals (such as government regulations) are used to allocate goods and services. It is not justified by the superiority of laissez faire over government intervention (A), nor does it rely on central planning by private firms instead of the government (C). While a mixed economy may allow for trade with other countries, this is not the defining characteristic of a mixed economy (D).

A Mixed Economy