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

2. 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)

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

4. 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

5. 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

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

7. 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