Suppose the public expenditure as a percentage of GDP of fou…

Question

Suppose the public expenditure as a percentage of GDP of four countries is shown in the table below

A	40%
B	50%
C	33%
D	36%

Which type of economy exists in these countries?

Answer 1

Suppose the public expenditure as a percentage of GDP of four countries is shown in the table below

A	40%
B	50%
C	33%
D	36%

Which type of economy exists in these countries?

Mixed ✓
Planned
Pure market
Traditional

Explanation

Government spending of 33% to 50% of GDP is large but not total. The private sector still produces much of the output.

This is a mixed economy, where government and private firms share economic activity. In a planned economy the government spends close to all of GDP.

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