Paper 3 · Economic Systems
Which of the following is a role that government plays in a mixed economy?
Asetting the output target that each private firm must reach during the year
Bowning all of the land, capital and enterprise employed in the country
Cproviding public and merit goods that the private sector would under-supply
Dfixing the price of every good and service that is sold in the shops
Explanation: In a mixed economy the private sector produces most goods while government does the things the market does badly: supplying public goods such as defence and street lighting, subsidising merit goods such as education and health, and correcting externalities. Setting every output target and every price describes a planned economy.
Derived from ZIMSEC Economics 6073/3 Paper 3, November 2018, Q1