Role of money in mixed economy
Money plays no less significant role in a mixed and a developing economy. A mixed economy is characterized by the prevalence of public sector and an equally important private sector which plays varying degrees of role. In England, the public sector serves to stabilize and regularize the imperfections in the economy and aims at providing services, which the private sector cannot provide without incurring huge social costs (like the public utility service). Prices and money, therefore, play an important part in a mixed and developing economy in determining the volume of output and employment in the private sector, as it is solely guided by the profit expectations calculated in terms of money. Further, in a developing and expanding economy, which has adopted ‘Mixed Economy’ as the pattern of development, more and more money is needed for the rapid monetisation of the non-monetised sector of the economy. Moreover, money will influence not only the relative shifts in the distribution ...