Which economic system is a mixed economy, combining government and private sector involvement?

• A. Barter
• B. Market economy
• C. Mixed economy
• D. Command economy

Answer: (C)

A mixed economy blends government involvement with private enterprise. In this system, markets determine most prices and production, but the government steps in to provide public goods and services, enforce laws and regulations, stabilize the economy, and sometimes redistribute income to address market failures or social goals. Most real-world economies rely on this mix, using market signals while maintaining policy tools to guide growth and protect citizens.

Barter involves trading goods directly without money, which isn’t about combining sectors. A pure market economy would minimize government involvement, not describe collaboration between sectors. A command economy centers on centralized planning with the government directing production and allocation, rather than balancing public and private roles.