The Rise of Mixed

Economies

The Rise of Mixed Economies• Market economies, although able to

provide the most benefits to individuals, are not able to meet the economic needs of modern society without the help of government.

• Government is needed to provide defense, roadways, education, safety nets, health care, mass transit, workplace safety, adequate income levels, adequate competition, product safety, etc.

A Continuum of Mixed Economies

Communism

Pure MarketHong Kong United States Finland China Cuba Singapore France Russia North Korea

Government’s Role in a Mixed Economy

• The government purchases land, labor, and capital from households in the factor market

• It purchases goods and services from businesses in the product market.

• In order to pay for its purchases and the services it provides households and businesses, it collects taxes from both.