Which economic system combines elements of both market and command economies?

The chosen answer, a mixed economy, refers to an economic system that incorporates elements of both market and command economies. In a mixed economy, the market primarily determines the production and pricing of goods and services through supply and demand, while the government plays a role in regulating or guiding economic activity to ensure the welfare of its citizens and to address inequalities.

This approach allows for private enterprise and individual choices to thrive, while also maintaining a level of government intervention aimed at achieving specific social goals, such as providing public services or protecting the environment. Countries like Canada and Sweden exemplify mixed economies, where both private businesses and government involvement coexist, reflecting their respective values and priorities.

Other systems, such as communism and socialism, lean more heavily toward collective ownership and government control over resources and production, reducing the influence of the market. Conversely, a free market economy emphasizes minimal government intervention, relying solely on market forces which can lead to significant disparities and issues that the government is not equipped to address. Thus, a mixed economy represents a balance between these extremes, maximizing the benefits of both market efficiency and social welfare.