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What are the limitations of a Mixed economy?
- a)High taxation and less incentive to work hard
- b)All profit goes to the government
- c)Restrictions on personal freedoms
- d)Uneven distribution of resources, consumer difficulty in obtaining information, and health-risk products
Correct answer is option 'A'. Can you explain this answer?
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What are the limitations of a Mixed economy?a)High taxation and less i...
Limitations of a Mixed Economy
High taxation and less incentive to work hard
One of the limitations of a mixed economy is that it results in high taxation and less incentive to work hard. This is because the government is heavily involved in the economy, and it relies on taxes to fund its programs and services. As a result, individuals and businesses may feel discouraged from working hard, as they may see little benefit from their efforts.
Effects of high taxation
High taxation can have several negative effects on the economy, including:
- Reduced economic growth: High taxes can reduce economic growth by reducing the amount of money available for investment and spending.
- Reduced productivity: High taxes can reduce productivity by discouraging people from working hard and investing in their businesses.
- Reduced innovation: High taxes can reduce innovation by reducing the amount of money available for research and development.
- Reduced competitiveness: High taxes can reduce competitiveness by making it harder for businesses to compete with other businesses in other countries.
Incentives to work hard
In a mixed economy, there may be less incentive to work hard, as people may feel that their efforts are not being rewarded. This can lead to a decrease in productivity and economic growth, as people may not be motivated to work hard and invest in their businesses.
Conclusion
In conclusion, while a mixed economy can have many benefits, such as providing a safety net for those in need and promoting economic growth, it also has limitations, such as high taxation and less incentive to work hard. To address these limitations, governments may need to find ways to reduce taxes and provide incentives for people to work hard and invest in their businesses.
High taxation and less incentive to work hard
One of the limitations of a mixed economy is that it results in high taxation and less incentive to work hard. This is because the government is heavily involved in the economy, and it relies on taxes to fund its programs and services. As a result, individuals and businesses may feel discouraged from working hard, as they may see little benefit from their efforts.
Effects of high taxation
High taxation can have several negative effects on the economy, including:
- Reduced economic growth: High taxes can reduce economic growth by reducing the amount of money available for investment and spending.
- Reduced productivity: High taxes can reduce productivity by discouraging people from working hard and investing in their businesses.
- Reduced innovation: High taxes can reduce innovation by reducing the amount of money available for research and development.
- Reduced competitiveness: High taxes can reduce competitiveness by making it harder for businesses to compete with other businesses in other countries.
Incentives to work hard
In a mixed economy, there may be less incentive to work hard, as people may feel that their efforts are not being rewarded. This can lead to a decrease in productivity and economic growth, as people may not be motivated to work hard and invest in their businesses.
Conclusion
In conclusion, while a mixed economy can have many benefits, such as providing a safety net for those in need and promoting economic growth, it also has limitations, such as high taxation and less incentive to work hard. To address these limitations, governments may need to find ways to reduce taxes and provide incentives for people to work hard and invest in their businesses.
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What are the limitations of a Mixed economy?a)High taxation and less i...
Option B and C are disadvantages of socialistic economy. option D is disadvantage of capitalistic economy. Hence option A is right
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What are the limitations of a Mixed economy?a)High taxation and less incentive to work hardb)All profit goes to the governmentc)Restrictions on personal freedomsd)Uneven distribution of resources, consumer difficulty in obtaining information, and health-risk productsCorrect answer is option 'A'. Can you explain this answer?
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