MBA 1st Year Mixed Economy Study Material Notes

MBA 1st Year Mixed Economy Study Material Notes: In this post, we will learn about MBA 1st Year Mixed Economy Study Material Notes. In MBA 1st Year there is one of the most important questions comes from Economic System. You will learn about MBA 1st Year Mixed Economy Study Material Notes. MBA is a process of development.

Related Posts to see:-

Bed 2nd Year Education and Knowledge Study Notes
Bed 2nd Year What do you mean by Measures of Environmental Conservation
Bed 2nd Year What do you understand by Sanctuaries and National Parks
Bed 2nd Year What do you mean by Components of Environment
Bed 2nd Year What do you understand by Nature of Environmental Education
Bed 2nd Year What do you understand by Integrated Land Use Planning
Bed 2nd Year What do you understand by Biodiversity
Bed 2nd Year What do you mean by Threats to Biodiversity
Bed 2nd Year What do you mean by Biodiversity in India
MBA 1st Year Economic System Study Material Notes

Or

View all Bed Notes ➜ <Click here>

Mixed Economy

It is a golden mixture of capitalism and socialism. Under this system, there is freedom of economic activities and government interference in social welfare. Hence, it is a blend of both economies. The concept of a mixed economy is of recent origin.

Developing countries like India have adopted a mixed economy to accelerate the pace of economic development. Even the developed countries like the UK, USA, etc. have also adopted a Mixed capitalist system

“Mixed economy is that economy in which both public and private sectors cooperate”

‘Mixed economy is that economy in which both government and private individuals exercise economic control” -Murat

Main Features of Mixed Economy

A mixed economy has the following main features:

1. Co-existence of Private and Public Sectors: Under this system, there is a co-existence of public and private sectors. In the public sector, industries like defiance, power, energy, basic industries, etc. are set up. On the other hand, in the private sector all the consumer goods industries, agriculture, and small-scale industries are developed. The government encourages both sectors to develop simultaneously. (MBA 1st Year Mixed Economy Study Material Notes)
2. Personal Freedom: Under a mixed economy, there is full freedom of choice of occupation, although consumer does not get complete liberty at the same time government can regulate prices in the public interest through the public distribution system
3. Private Property is Allowed: In a mixed economy, private property is allowed. However, here it must be remembered that there must be equal distribution of wealth and income. It must be ensured that the profit and property may not concentrate in a few pockets. (MBA 1st Year Mixed Economy Study Material Notes)
4. Economic Planning: In a mixed economy, the government always tries to promote the economic development of the country. For this purpose, economic planning is adopted. Thus, economic planning is very essential under this system.
5. Price Mechanism and Controlled Price: Under this system, the price mechanisms and regulated prices operate simultaneously. In consumer goods industries, the price mechanism is generally followed. However, at the time of big shortages or during national emergencies, prices are controlled and the public distribution system has to be made effective.
6. Profit Motive and Social Welfare: In a mixed economy system, there are both profit motives like capitalism and social welfare as in a socialist economy. (MBA 1st Year Mixed Economy Study Material Notes)
7. Check on Economic Inequalities: In this system, the government takes several measures to reduce the gap between rich and poor through progressive taxation on income and wealth. The subsidies are given to the poor people and also job opportunities are provided to them. Other steps like concessions, old age pension, free medical facilities, and free education are also taken to improve the standard of poor people. Hence, all these help to reduce economic inequalities.
8. Control of Monopoly Power: Under this system, the government takes huge initiatives to control monopoly practices among private entrepreneurs through effective legislative measures. Besides, the government can also take over these services in the public interest. (MBA 1st Year Mixed Economy Study Material Notes)

Types of Mixed Economy

The mixed economy may be classified into two categories:

1. Capitalistic Mixed Economy: In this type of economy, ownership of various factors of production remains under private control. The government does not interfere in any manner. The main responsibility of the government in this system is to ensure rapid economic growth without allowing the concentration of economic power in a few hands.
2. Socialistic Mixed Economy: Under this system, means of production are in the hands of the state. The forces of demand and supply are used for basic economic decisions. However, whenever and wherever demand is necessary, the government takes action so that the basic idea of economic growth is not hampered.

However, this system is again sub-divided into two parts:

1. Liberal Socialistic Mixed Economy: Under this system, the government interferes to bring about timely changes in market forces so that the pace of rapid economic growth remains uninterrupted.
2. Centralized Socialistic Mixed Economy: In this economy, major decisions are taken by the central agency according to the needs of the economy, (MBA 1st Year Mixed Economy Study Material Notes)

India is the best example of a mixed economy.

(a) In India, we have both public and private banks.

(b) The awesome thing about the mixed economy is that capitalism and socialism work together.

(c) Consider the railway system of India. Actually what happens is that the trains are owned by the government but the railway stations are owned by the capitalist also. (MBA 1st Year Mixed Economy Study Material Notes)

(d) Take the example of the airline sector, we have both public and private airlines. We can see that Air India works well with the other capitalist company, (MBA 1st Year Mixed Economy Study Material Notes)

(e) India has a problem with its distribution of income and access to free markets since many of its residents are poor and have no way out of poverty. Most residents of India are Hindus and although they either worship Shiva or Vishnu, India still struggles with caste sys ranking humans in inherited socioeconomic classes. For this reason, a person is either born rich or born poor and has no way to reverse that status going forward. (MBA 1st Year Mixed Economy Study Material Notes)

With the idea u much of its population is considered ‘untouchable’ Dalit or unclean, it should be difficult for the country as a whole to prosper. But in fact, the rich get richer despite these internal issues. In the early part of the century, the caste system hampered India’s development, but today, lower castes are demanding to be satisfied and given full-paying jobs which allow them to qualify for benefits, privileges, and the chance at a higher quality of life which was not possible in years past.

(f) Although many Indian residents are still illiterate (though Indian literacy rates improving), they are realizing that it is possible to pull themselves out of poverty by any means possible. At the upper levels of education, India excels and produces very high qualified graduates who go on to study and work in other countries around the world.