An economy in which both the private and the public sector coexist is known as a …………
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Mixed economy.
Every economy must decide what to produce, how and for whom; in some the market decides, in others the government. After independence India chose a middle path: the private sector produces what the market can provide well, and the public sector provides the essential goods and services the market fails to provide. An economy in which the two coexist like this is a mixed economy.
It sits between the two other systems:
Market economy (capitalism): the market forces of demand and supply answer these questions; cars are produced if cars are in demand.
Socialist economy: the government answers them, deciding what is produced according to the needs of society.
Why the other options are incorrect
Option (1) Dualistic economy — Incorrect. A dualistic economy is one split into a modern and a traditional sector, such as advanced industry beside backward agriculture. It describes a division by level of development, not by who owns and runs production.
Option (3) Futuristic economy — Incorrect. There is no such term.
Option (4) Strategic economy — Incorrect. There is no such term.
Note: A same/similar question was asked in CUET (UG) in the papers below.
| 2026 | 2025 | 2024 | 2023 | 2022 |
| 21-05 S1 | 22-05 S1* | – | – | – |
* A similar question.
NCERT (2025-26): “Box 2.1: Types of Economic Systems … Strictly, a socialist society has no private property since everything is owned by the state. In Cuba and China, for example, most of the economic activities are governed by the socialistic principles. Most economies are mixed economies, i.e. the government and the market together answer the three questions of what to produce, how to produce and how to distribute what is produced. In a mixed economy, the market will provide whatever goods and services it can produce well, and the government will provide essential goods and services which the market fails to do.” |