Certification in Supplier Diversity Practice Exam

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What best defines a mixed economy?

An economy that relies solely on government-run enterprises
An economy that operates primarily with private enterprises
An economy that operates with a mix of state-owned and private enterprises
An economy where all businesses are cooperatives

The correct answer is: An economy that operates with a mix of state-owned and private enterprises

A mixed economy is best defined as one that operates with a combination of state-owned enterprises and private enterprises. This system allows for a balance between the free market and government intervention, aiming to harness the benefits of both while addressing their shortcomings. In a mixed economy, the government may regulate or control certain industries—such as healthcare, education, or transportation—while also allowing private businesses to flourish in others. This helps to promote social welfare while still encouraging economic growth and innovation through competition in the private sector. The other options describe economic systems that are too rigid or singular in their approach. These distinctions are important for understanding the diverse frameworks through which economies can be structured.