(a) What is an Economic system?
(b) Explain any three characteristics of a mixed economic system.
(c) State any two disadvantages of a mixed economic system.
Explanation
(a)An economic system is an arrangement for managing the relatively scarce resources in a particular place and at a particular time.
(b) (i) The government uses various policies to promote economic growth and stability.
(ii) The government provides and maintains infrastructural facilities e.g roads, water, electricity, etc which are not provided by the private sector.
(iii) Some factors of production are owned by private individuals and firms while others are owned by the government.
(iv) People are free to choose their occupations, however, the government can still influence people's choice of occupation e.g. providing funds for certain courses - medicine and teaching
(v) Resources are allocated by both the price mechanism and the government. The government caters for the welfare of people.
(c) (i) Government may raise the level of taxation excessively.
(ii) Government spending may be at variance with people's wishes.
(iii) Government price control measures often disturb the price mechanism.
(iv) There are often disagreements over the degree of government intervention