Mixed Economy:
In a mixed economy, both private and public institutions exercise economic control. The public sector functions as a socialistic economy and private sector as free endeavor economy. Every decision regarding what, how and for who to generate are taken by the State. The private sector generates and distributes services and goods. It creates consumer and capital goods in the interest of public welfare. The mixed economy possesses the freedom to hold private property, to consume, produce & distribute, to earn profit, and to have any occupation. However when these freedoms affect public welfare adversely, they are synchronized and controlled by the State. The major features of mixed economic system are:1. Co-existence of Public and Private Sectors:
In a mixed economy, both the public and private sectors initiatives will be there. The most deliberately and nationally significant sectors of the economy will be reserved for the public sector. The rest will be left for private operation. While the public sector will contain social well-being as the prime motive, the private sector will execute with profit motive.2. Consolidation of merits of Capitalism and Socialism:
As illustrated above, both capitalism and socialism have advantages and disadvantages. Mixed economy is predicted to retain only the advantages of the two systems. For example, the government is expected to permit private investment, however the government too controls monopolies.3. Planning:
Economic planning is the other significant feature of the mixed economy. Planning will direct the associative roles of public and private sectors and their respective commands.
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