Written by the Fiveable Content Team • Last updated September 2025
Verified for the 2026 exam
Verified for the 2026 exam•Written by the Fiveable Content Team • Last updated September 2025
Definition
A mixed economy is an economic system that combines elements of both capitalism and socialism. In this system, there is a blend of privately-owned businesses operating alongside state-controlled enterprises.
Related terms
Free Market Economy: A free market economy is characterized by minimal government intervention where prices are determined by supply and demand forces.
Command Economy: In contrast to a mixed economy, a command economy is controlled entirely by the government with little to no private ownership or market influence.
Welfare State: A welfare state refers to a system where the government provides social programs and services to ensure citizens' well-being through healthcare, education, unemployment benefits, etc.