How does a mixed economy promote economic diversification?

Economics Mixed Economy Questions



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How does a mixed economy promote economic diversification?

A mixed economy promotes economic diversification by allowing both private and public sectors to coexist and participate in economic activities. In this system, individuals and businesses have the freedom to engage in entrepreneurship and pursue their own economic interests, leading to a wide range of industries and sectors. At the same time, the government plays a role in regulating and providing essential services, such as infrastructure development, education, healthcare, and social welfare. This combination of private and public involvement encourages a diverse economy with a variety of goods, services, and employment opportunities, reducing dependence on a single industry or sector and promoting overall economic stability and growth.