Which term best completes the following sentence? A mixed economy is a(n) ______ economy that includes government spending and taxation.

• A. traditional
• B. hybrid
• C. market
• D. command

Answer: (B)

Verified step by step guidance

1. Understand the definition of a mixed economy: it is an economic system that combines elements of both market and command economies.
2. Recall that a traditional economy is based on customs and traditions, which is different from a mixed economy.
3. Recognize that a market economy relies primarily on private enterprise and market forces, while a command economy is controlled by the government.
4. Note that a mixed economy includes government intervention such as spending and taxation alongside market mechanisms.
5. Conclude that the term 'hybrid' best describes a mixed economy because it blends features of both market and command economies.