What is a modified market economy? What factors have been responsible for the emergence of this k
ind of economic system? How do governments influence economic decision making in such systems? Use
Australian examples to illustrate your answer.
A modified market economy is a market economy in wh
ich there are varying amounts of intervention and property ownership by the government. The Australi
an economy would be classed as a modified market, as we have a certain degree of government interve
ntion, and this is something we should feel lucky for in our country, because due to this we are a
ble to experience the free, fair lifestyle which we enjoy.
The emergence of this kind of economy i
s mainly due to weaknesses in the market economy which, with out regulation, becomes an economy ma
inly concentrated on the wealthy people. The basic reason for the modified market economy is that t
he free market does not produce an efficient allocation of resources, and that the free market does
not distribute output in a socially desirable way. For example in a modified market, the government
regulate the flow a income a bit so that not only the rich make money. In a market economy the ric
h get richer and the poor get poorer as there is no regulation in terms of income distribution. The
intervention by the government, in forms such as social security nets, which is present in a modi
fied market, makes society more evenly spread rather than everyone being one of two things, that is
, very rich, or very poor.
In such economies as these, the government influence economic decisio
n making much to our advantage in terms of them providing many of the resources needed to satisfy co
llective wants, making restrictions upon what can and can not be done, in the interests of our hea
lth, the environment, impacts upon society etc. Through this they regulate much of the possible '
bad' economic decisions that could be made. The Australian government does place some limitations o
n freedom of enterprise, but generally encourages private business activity as it is an advantage
to our whole economic growth in terms of employment etc. The Australian government also encourages
the idea of fair competition. To keep the consumer choice less restrictive the government might not
allow certain take overs that may limit the number of choices available to the consumer. Competiti
ve prices that come from businesses are also good for the economy in general, for example if an Aus
tralian owned company, such as Uncle Toby's, can provide the same food as an American owned compan
y at a competitive price, then consumers will tend to buy from the Australian company which keeps m
ore our money in our country.
Basically, the government intervention in economies such as ours, i
s all done to benefit our economy as a whole, to help even the distribution of income, to provide
resource to help satisfy our unending collective wants. It is all done in an effort to make our cou
ntry's economy as efficient and all round satisfying, as possible. To make our country a prosperou
s and enjoyable place to live.what modified market economy what factors have been responsible emerge
nce this kind economic system governments influence economic decision making such systems australian
examples illustrate your answer modified market economy market economy which there varying amounts
intervention property ownership government australian would classed modified have certain degree gov
ernment intervention this something should feel lucky country because this able experience free fair
lifestyle which enjoy emergence kind mainly weaknesses which with regulation becomes mainly concent
rated wealthy people basic reason that free does produce efficient allocation resources that free do
es distribute output socially desirable example government regulate flow income that only rich make
money rich richer poor poorer there regulation terms income distribution intervention forms such soc
ial security nets present makes society more evenly spread rather than everyone being things very ri
ch very poor such economies these influence economic decision making much advantage terms them provi
ding many resources needed satisfy collective wants making restrictions upon what done interests hea
lth environment impacts upon society through they regulate much possible decisions could made austra
lian does place some limitations freedom enterprise generally encourages private business activity a
dvantage whole growth terms employment also encourages idea fair competition keep consumer choice le
ss restrictive might allow certain take overs limit number choices available consumer competitive pr
ices come from businesses also good general example owned company uncle toby provide same food ameri
can owned company competitive price then consumers will tend from company keeps more money country b
asically economies ours done benefit whole help even distribution income provide resource help satis
fy unending collective wants done effort make country efficient round satisfying possible make prosp
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