What is a "mixed economy"?

A mixed economy is characterized by the incorporation of both capitalist and socialist elements, creating a system that utilizes the strengths of each. In this type of economy, private enterprise exists alongside government intervention, allowing for a balance in which the market determines many goods and services while the government regulates certain sectors to ensure public welfare and economic stability.

Under capitalism, the focus is on private ownership and the profit motive, which can drive innovation and efficiency. Meanwhile, elements of socialism within a mixed economy may include government ownership or control of key industries, social welfare programs, and public policies aimed at reducing inequality and ensuring access to essential services.

This blend allows mixed economies to address some of the shortcomings found in purely capitalist or socialist systems. For instance, by regulating monopolies or providing social safety nets, a mixed economy seeks to mitigate market failures and protect the most vulnerable members of society.

The other answer choices do not accurately encapsulate the essence of a mixed economy. Barter systems do not inherently involve the blend of capitalist and socialist influences, government ownership alone does not account for the role of market mechanisms, and eliminating competition is contrary to the principles that typically govern a healthy mixed economy.