Advantages And Disadvantages Of Mixed Economy

1.0 Introduction

Economic system is the basic arrangements made by societies of the respective country to solve its economic problems. Basically there are three types of economic systems which are the command economic system, the market economic system and the mixed economic system. Each economy system comes with its own strengths and weaknesses (Sloman and Garratt, 2009).

According to Investopedia, (2010) a command economic system is where the country’s government plans and controls all aspects of the economic production. The government determines what goods to produce, how to produce, at what price and also how to distribute goods and services within the economy system. The government will control and regulate the suppliesy and prices of

c) Mixed Economy

Since mixed economy involves both government and private enterprises, Sweden has the advantage of taking the benefits of capitalist nature of private companies and socialist nature of government. Besides that, there is less inequality of income because intent of government is to have a balanced economic growth of an economy. Mixed economy allows individuals to run their business and make profits but at the same time it places some responsibility on these companies by inducing them to contribute towards the welfare of society.

Disadvantages of Mixed Economy

The disadvantage of having mixed economy in Sweden is the welfare of society is important in a mixed economy it leads to lower than optimum use of the resources because government mobilize the resources towards the production of those goods and services which are beneficial for the society as a whole rather than producing those goods and services which in economic terms are more beneficial for an economy.

Under mixed economy private enterprises have to face lot of difficulty because of various government loopholes like favoritism and bureaucratic nature which is prevalent in mixed economy. (Letslearnfinance.com,