What is the role of government in a mixed economy?

In a mixed economy, the government plays a crucial role in balancing the benefits of a free market with the need for regulation and support for public welfare. One of its primary functions is to provide public goods, which are services or goods that the market may not supply adequately on its own. This includes things like national defense, public parks, and infrastructure that benefit society as a whole.

Additionally, the government regulates the economy to address and mitigate market failures, such as monopolies, pollution, and information asymmetry, ensuring fair competition and protecting consumers and the environment. This regulatory capacity helps create a more equitable economic environment while still allowing for private enterprise and market-driven forces to operate.

The other options suggest extremes: complete laissez-faire would disregard the need for government intervention in maintaining market stability and fairness, while aiming to remove all market failures is impractical as some failures may be inherent to market operations. Lastly, controlling all means of production is characteristic of a command economy, which is contrary to the principles of a mixed economy that values both private property and government oversight. Thus, the government serving to provide public goods and regulate the economy accurately reflects its essential functions within a mixed economy framework.