In your opinion which economic system is best for Pakistan?

Gives Solid Argument. (500-1000)

“Mixed Economy”

A mixed economic system is an economic system that features characteristics of both

capitalism and socialism. A mixed economic system allows a level of private economic
freedom in the use of capital, but also allows for governments to interfere in economic
activities in order to achieve social aim. As a result, some institutions are owned and
maintained by the government, while others are owned by the private sector.
 This system usually begins by authorizing private enterprises to run the majority of
businesses before the government intervenes with specific areas of economics, such as
inflation protection and taxes. Great examples of countries running on mixed economy are
Sweden, Iceland, UK, France, US.

Characteristics of Mixed Economy

 People are given freedom to choose
 Government protects the rights of the people to make those choices.
 Basic Social Services are guaranteed by the government.
 Taxes are imposed on the people to fund these services.
 Anyone can compete in the market place.
 Allows for economic mobility.
 Creates competition within the market, this will drive down prices and Improves the
quality of products

Equal Distribution of Control

Unlike command economies that put the government primarily in charge, a mixed economy
gives the government less regulation and control. This provides the private market with
freedom to thrive, operate, expand and grow.

More Efficiency for Private Firms

As stated above, most of the business is left to the private firms, so these organizations are
more likely to be efficient compared to groups that are controlled by the government, as they
have profit incentive for being innovative and for cutting costs.
Freedom for Private Enterprise to Thrive on Their Own
In most cases, private companies can perform public service jobs more efficiently than the
government itself. In addition, businesses can allow people to enjoy financial rewards for
hard work.

Safe Haven from Poverty

A mixed economy can help create improved equality and can offer safety net that will
prevent the people in a certain country from suffering absolute poverty. It even allows people
to enjoy financial rewards of hard work and entrepreneurship. Pros and cons of mixed
economy

Greater Chance for the Government to Implement Good Policies

This type of economic system is known for allowing government regulations in areas where
market failure is experienced. This means that a region will have more space to develop and
grow to attain economic success

More Job Investments Coming In

For private companies to improve profits, they often will not try to increase income, but decrease
expenditure instead by cutting down on employment. These days, this comes not only in the form of
job cuts, but outsourcing as well

Role of government in mixed economy

Governments regulate mixed economies by formulating rules and regulations to protect the
producers and consumers in the market.
Regulation also serves as a means of ensuring that mixed economies utilize economic
resources efficiently and allocate scarce resources in a scientifically responsible manner.
Governments plan the necessary production targets in private industries while protecting the
defence, public utility services and heavy industries. Economic inequality is also minimized
in a mixed economy because income gets redistributed through taxation and government
subsidies.
Mixed economy involves both government and private enterprises it has the advantage of
taking the benefits of capitalist nature of private companies and socialist nature of
government. 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.
 Transcript of circle flow model

 Government buys land, labour, and capital from households in the factor market.

Government in factor market

 governments purchase goods and services in the product market. governments also
provide certain goods and services through the factor resources that they combine.

 Government in the Product Market

buildings and office supplies, telephones, computers and fax machines.