CMA Foundation · Fundamentals of Business Economics and Management · The Fundamentals of Economics
India's economy has private firms such as Tata and Infosys operating alongside public sector undertakings like Indian Railways and ONGC, with the government also regulating key sectors. Which description best fits this economic system?
This is a mixed economy, because private enterprises and government-owned undertakings operate together and the state also regulates important sectors. It is neither purely capitalist, with minimal state role, nor a command economy, where the government controls nearly all production.
- AMixed economyCorrect
- BPure capitalist economy
- CCommand economy
- DClosed subsistence economy
Explanation
Coexistence of private enterprise and significant state ownership and regulation defines a mixed economy. A pure capitalist economy would have almost no public sector. A command economy would have the state owning nearly all resources, which is not the case here.
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