What type of economy combines private enterprise with government regulation?

A mixed economy is characterized by the combination of private enterprise and government regulation. This system recognizes the benefits of both market-driven initiatives and the need for some level of government intervention. In a mixed economy, the market is primarily responsible for the allocation of resources and the production of goods and services, while the government steps in to regulate certain aspects to address market failures, ensure social welfare, and provide public goods.

For instance, the government may impose regulations to protect the environment, regulate monopolies, or provide social safety nets. This balance allows for the efficiency and innovation associated with private enterprise while also addressing equity and public interests through regulation, making it a pragmatic approach to economic management.

In contrast, a market economy relies solely on supply and demand to allocate resources with minimal government intervention, while a command economy is centrally planned by the government, and a traditional economy is based on customs and traditions with little emphasis on modern economic practices. Therefore, the mixed economy incorporates the strengths of both private and public sectors, making it the most accurate choice for this question.