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SS2: ECONOMICS - 2ND TERM

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Definition of Mixed Economic System

Mixed economy is an economic system in which the management, control, and ownership of the means of production are in the hand of both the private and public. The means of production are jointly owned by individuals and the government. Examples of countries that practice a mixed system are Nigeria, Brazil, Ghana, etc.

Features of Mixed Economic System

1. Decisions are jointly made by the government and the private, decisions of what to produce, how to produce, and for whom to produce are jointly made.

2. Both make decisions that will promote the economy

3. The public sector is to benefit the people while the private sector is to make profit.

4. Economic activities are maintained by government and private.

5. Mixed economy is characterized by capitalism but modified by government action.

Advantages of Mixed Economy

1. Government has the power to check the inequality of income and wealth

2. Existence of competition among the manufacturers and final consumers

3. It encourages private innovation and initiatives

4. It boost economic growth and development

5. There is an existence of consumer sovereignty (provision of alternative choice)

Disadvantages of Mixed Economy

1. The interference of government often affects the price system

2. Government has the power to increase taxation unnecessarily

3. The level of government intervention may be a major disagreement

4. It may encourage exploitation of the people

5. Inequality of income may also occur

Evaluation Questions

1. What is an economic system?

2. Explain any four features of socialism 

3. List and explain three advantages and two disadvantages of capitalist economic system.

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Evaluation questions

  1. What is an economic system?
  2. Explain any four features of socialism 
  3. List and explain three advantages and two disadvantages of capitalist economic system.

Solution

1.What is an economic system?

An economic system refers to the methods of organizing production and consumption activities in any given country

2. Explain any four features of socialism

i. Socialism is a government-controlled economy. The government makes productive decisions.

ii. Private control of production and investment is at a minimal level. It is not a free market economy

iii. It is not a profit-oriented economy. Only public goods are produced

iv. The citizens work collectively for the advancement of the economy. Collective interest is protected

3 Explain three advantages and two disadvantages of capitalism

Advantages of capitalism

  1. It encourages freedom of choice for producers and consumers and promotes economic growth and development
  2. It encourages hard work and enhances self-reliance
  3. The existence of competition brings about high and improved quality products and innovation

Disadvantages of capitalism

  1. There is usually a wide gap between the poor and the rich. The government fails to cater to the low-income earners
  2. It may lead to private and foreign monopoly and profit orientation may lead to a high cost of living

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