What characterizes a mixed or modified free enterprise economy?

• A. No government involvement whatsoever
• B. Complete government control of all businesses
• C. Free economic affairs with some level of government regulation
• D. Only private ownership of resources

Answer: (C)

A mixed or modified free enterprise economy is characterized by the coexistence of both private ownership and government intervention in the economic affairs of a nation. In this system, individuals and businesses operate freely in most aspects of the economy and are driven by profit motives, which is a fundamental aspect of free enterprise. However, the government plays a crucial role in regulating certain sectors to ensure fairness, protect public welfare, and prevent monopolies or other practices that could harm the economy or society at large.

This balance allows for economic efficiency and innovation through competition, while also addressing issues such as environmental protection, consumer rights, and economic inequality. Therefore, the defining feature of a mixed economy is this combination of free economic activities alongside some necessary regulations. This hybrid approach aims to utilize the strengths of both free enterprise and government oversight to promote both economic growth and social equity.