Question

The Boldovian government took Sea Lion Inc., a domestic, private shipbuilding firm, into state ownership to save the company from bankruptcy. However, the other private competitors in the shipbuilding industry were raged at this decision of the government. As a result, the government had to reduce the tax burden on all other private shipbuilding firms so that both the state-owned enterprise and private firms could co-exist. According to this information, Boldovia has most likely adopted a _____ economy.

A. mixed
B. market-based
C. command
D. laissez-faire
E. communist

Answer 1

The correct answer is A. Mixed.

Step-by-step explanation:

The mixed economy refers to an economic model that uses the market to allocate resources, but in which the State intervenes to regulate its operation, incorporates elements of the free market economy and the planned economy, or a proposal in which the private ownership of capitalism and the collective ownership of socialism coexist (in general, and not exclusively, in a state or public way) in order to include broader social considerations in an economic system, for example, ethics, social justice, social welfare, sustainable management of the environment, etc. It is the economic model defended by the social democratic currents, being its most obvious example, the Scandinavian countries, such as Norway, Sweden or Denmark. On the other hand, the term is not exempt from debate, nor is there a commonly accepted strict definition, either in English or Spanish.

Answer 2

A. mixed

Step-by-step explanation:

It is a mixed economy because it combines state-owned business with private business in the same sector to compete between each other, and it also combined with a market-based policy such as tax cuts on the private ones. So it keeps the market while having a state-owned business competing in it. It is a classic mixed economy.