An economy that balances government intervention with free enterprise is known as a:

• A. command economy
• B. market economy
• C. traditional economy
• D. mixed economy

Answer: (D)

Verified step by step guidance

1. Understand the definitions of the different types of economies: a command economy is one where the government controls most economic activities; a market economy relies primarily on free enterprise and market forces; a traditional economy is based on customs and traditions.
2. Recognize that the problem asks for an economy that balances government intervention with free enterprise, meaning it incorporates elements of both government control and market freedom.
3. Recall that such an economy is called a mixed economy, which combines features of both command and market economies.
4. Identify that the options given do not explicitly list 'mixed economy' except in the explanation, so the correct term for the described economy is 'mixed economy'.
5. Conclude that the answer is 'mixed economy' because it best fits the description of balancing government intervention with free enterprise.