Chapter 2, Problem 2AA

To determine

The best term which completes the sentence with correct meaning.

Answer to Problem 2AA

Option (d)- Regulate.

Explanation of Solution

In an economic system which has both the private and public functioning, that is the mixed kind of economic system, the government tries to regulate the functioning of the businesses by influencing and controlling the area with laws defined so that social aims can also be achieved along with the revenue generation motives of the sectors.

So this economic system is considered as the best working system as it gives equal importance and focus to social welfare along with the motive of profit maximization in the economy.

No other options fit in the blank as the answer to this question because the question talks about the laws to control the economy which relates to the regulations by the government and so the option ‘regulate’ fits directly to it.

Economics Concept Introduction

Introduction:

A mixed economy can be defined as an economic system which combines the elements of a planned economy with the market economy. In simple words, it is a system in which there is economic freedom along with government intervention in the economic activities so that not only profit but social aims are also focused.