CHAPTER 29 – INTRODUCTION TO ECONOMICS Mixed Economy
A mixed economy is an economy in which the government and private business share the production of goods and services. The government controls certain areas of production (e.g. transport, energy, education and healthcare), but citizens are also free to set up businesses. This means that the economy is made up of private businesses and state-sponsored bodies.
Mixed economies have varying levels of government involvement from country to country. An example of a mixed economy is the Irish economy.
A Island economics
In groups, go to page 209 of your Activities and Accounts Book to decide on an economic system for your very own island.
THE IRISH ECONOMY
When a good or service is not profitable to produce, a private business may not be interested in providing it or may charge a very high price. This causes a problem for the people who need the good or service in question. In a mixed economy, such as Ireland, the government tries to balance the needs of its citizens with the aims of business.
The mixed economic system operating in Ireland offers a number of advantages to its citizens as it allows the government to:
• Regulate prices (e.g. the price of electricity).
• Provide state-run options for unprofitable yet essential services, such as rural transport.
• Offer subsidies to help with the cost of essential services.
The Irish government does not need to supply the goods and services that can be supplied by private businesses.
Private businesses are responsible for providing the majority of our goods and services in Ireland. For example, we may buy our groceries from Lidl or Dunnes Stores and purchase electricity from Airtricity or Energia.
