MIXED ECONOMIES In today’s world, most economies combine varying degrees of market, command, and even traditional systems.

Weaknesses of the Free Market Markets leave some needs and wants unanswered (highways) Markets don’t always let everyone participate (education) Markets can’t enforce contracts or issue patents Markets can’t protect private property rights (5th/14th Amendments)

Mixed Economies Exist on a Continuum (A range with no clear divisions) Centrally Planned economies exist on one end (North Korea, Cuba)

Mixed Economies Exist on a Continuum (A range with no clear divisions) Free market economies exist on the other end (Hong Kong, Singapore) Mixed economies exist somewhere in between based on degree of government intervention

Mixed Economies with Significant Government Intervention Government owns some/all property and produces some/all of the goods Imports sometimes restricted/banned Foreign companies not completely welcome As a centrally planned economy transitions to a market economy it privatizes (sells to individuals) firms Examples: China, Russia

Mixed Economies with Significant Market Characteristics Limited government involvement in economy No/few trade barriers Open to foreign investment Examples: Hong Kong, United States

Key Features of U.S. (Mixed) Economy Free enterprise: profit motive, open opportunity, private property rights, free contract, etc. Government regulation: consumer/environmental protections (negative effects include higher bus. costs) Free trade with some protectionism Foreign investment encouraged Banks are allowed to operate relatively independently