Here's Some Extra Info ;;
The government does not direct the private sector to produce certain goods and services in certain quantities at certain times. The government's influence in the economy stems from the amount of money which is raised in the form of taxes and borrowings from the private sector, that way the money the government spends and uses through different things, redistributes and such to help poeple out.
Today, most countries economies are considered mixed economies. In Western European area's, the government often plays a bigger part in the economy, compared to the way they are in North America.
Governments, can be incapable for delivering some goods and services. They are considered most inefficient at delivering public goods; which is something everyone wants. Problem is, no one wants to pay for these things. In market economies, there is a rather poor record of public goods being met.
Though a lot of people like to say the U.S. is a purely market economy, it can actually be considered a mixed economy. The federal government alone accounts for about 19 percent of the U.S. economy (depending on what forms of government spending are counted.) Adding state and local governments brings the public sector share up to about 28 percent.
- In a market economy there is a social system which is basically based on the prices of goods and services which are determined in a free price system set by supply and demand.