Economic and Philosophic Ideas 2

Planned Economy

Unlike a market economy, a planned economy has a central power, usually the government, that directs and organizes nearly all aspects of the economy. For instance, in a market economy, supply and demand controls the price of an item. In a planned economy, the government decides how many items to make and at what price to sell those items. The Soviet Union is one example of a nation that worked under a planned economy.

Mixed Economy

A mixed economy has a mixture of public and private ownership of goods. In a mixed economic system, the government might control certain features of the economy, but personal ownership and free enterprise would still be given to citizens. Also, most modern mixed economies tend to be more capitalist than socialist. The United States uses a mixed economic system because the government oversees certain agencies, such as the US Postal Service, but people engage in free enterprise and personal ownership for the majority of economic activity.