Lesson 15 — Activity 1: What Is a Mixed Economy?


Warm Up


So far you've learned that a market economy is based on choices being made by producers and consumers interacting with each other without input from the government. In this activity, you will learn about a mixed economy .

A mixed economy blends government and private ownership. You can remember this by the term "mixed," because government and private "mix" with elements of each other. So in a mixed economy, everyone, including government, consumers, producers, and employees, are able to have their say.


Most of the world's major economies are now mixed economies, including Canada.

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Mixed Economy Characteristics


~ Individuals and businesses as decision makers for the private sector

~ Government as decision maker for the public sector

~ A greater government role than in a free market economy

~ Most common economic system today


A mixed economy adjusts to change and keeps large losses and gains to a minimum. Individual gains depend on the communities' success. So, as a community's economic status improves, the citizens of the community do well.

Perhaps the best part of the mixed economy system is that it has the ability to allow an individual to prosper when his or her community is in decline. As the individual profits, he or she will begin to pour money back into the community, helping the community's economic status rise along with its citizens' success.


Most mixed economies allow the government to have a command role in areas that safeguard the people and the market itself. This usually includes the military, international trade, and national transportation. An increased governmental role depends on the priorities of the people.

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Bank of Canada

Many mixed economies also allow centralized planning and even government ownership of key industries, such as aerospace, energy production, and even banking. Some mixed economies encourage the government to centrally manage health care, welfare, and retirement programs.

Self-check!

Try This!

Try the question below on your own first, and then click on the tab to check your answer! You can look back in the lesson to find the answer.


Which of the following is the best explanation of a mixed economy?

  1. The consumer plays a larger role than the government. The economy is run by the consumers' purchasing choices.
  2. The government controls all of the decisions.
  3. There are both private and government owned companies that work to control the economy.
  4. There are only private companies that control the economy.



There are both private and government owned companies that work to control the economy.



Digging Deeper!

Click on the Play button below to watch a video on the definition of a mixed economy.