What defines a mixed economy?

A mixed economy is defined by the combination of both private and public enterprise, which is captured in the correct answer. This type of economy allows for the private ownership of businesses and property while also involving government regulation and provisions for public goods and services. The presence of both sectors helps to balance the efficiency of the market with the social welfare objectives of government.

For instance, in a mixed economy, while individuals and businesses can make decisions about production and consumption based on supply and demand, the government may step in to regulate certain industries, provide public services like education and healthcare, and implement policies aimed at promoting economic stability and equity. This dual approach seeks to harness the strengths of both market-driven mechanisms and state intervention to benefit society as a whole.

In contrast, an economy entirely controlled by the state would deny the private sector any meaningful role, and one based solely on market forces would eliminate government involvement, potentially leading to inequalities and market failures. An economy with no government intervention would lack the regulatory framework often needed for social welfare, thus highlighting the importance of a mixed approach.