The Boldovian government took Sea Lion Inc., a domestic, private shipb

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 enraged by 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 what type of economy?
A. Mixed

B. Market-based

C. Command

D. Laissez-faire

E. Communist

ANSWER

A
In a mixed economy, certain sectors of the economy are left to private ownership and free market mechanisms while other sectors have significant state ownership and government planning. In mixed economies, governments also tend to take into state ownership troubled firms whose continued operation is thought to be vital to national interests.