1. Reduction in Inequalities: No one is allowed to own and use private property to exploit others.
2. Rational Allocation of Resources: The central planning authority allocates the resources in a planned manner. Wastages are minimised and investments are made in a pre planned manner.
3. Absence of Class Conflicts: As inequalities are minimum, there is no conflict between rich and poor class. Society functions in a harmonious manner.
4. End of Trade Cycles: Planning authority takes control over production and distribution of goods and services. Therefore, economic fluctuations can be avoided.
5. Promotes Social Welfare: Absence of exploitation, reduction in economic inequalities, avoidance of trade cycles and increase in productive efficiency help to promote social welfare.

1. Concentration of Wealth and Income: Capitalism causes concentration of wealth and income in a few hands and thereby increases inequalities of income.
2. Wastage of Resources: Large amount of resources are wasted on competitive advertising and duplication of products.
3. Class Struggle: Capitalism leads to class struggle as it divides the society into capitalists and workers.
4. Business Cycle: Free market system leads to frequent violent economic fluctuations and crises.
5. Production of non essential goods: Even the harmful goods are produced if there is possibility to make profit.

1. Status of Development: Developed, underdeveloped, undeveloped and developing economies.
2. System of Activities: Socialistic and Mixed Economies.
3. Scale of Activities: Small and Large Economies.
4. Nature of Functioning: Static and Dynamic Economies.
5. Nature of Operation: Closed and Open Economies.
6. Nature of Advancement: Traditional and Modern Economies.
7. Level of National Income: Low Income, Middle Income and High Income Economiesapitalistic 

Macro economics suffers from certain limitations. They are:
1. There is a danger of excessive generalisation of the economy as a whole.
2. It assumes homogeneity among the individual units.
3. There is a fallacy of composition. What is good of an individual need not be good for nation and viceversa. And, what is good for a country is not good for another country and at another time.
4. Many non - economic factors determine economic activities; but they do not find place in the usual macroeconomic books.

Lack of Co-ordination:
The greatest drawback of Mixedism is lack of co-ordination between public sector and private sector.
Inefficiency:
Most of the public sector enterprises remain inefficient due to lethargic bureaucracy, red tapism and lack of motivation.
Fear of Nationalization:
In mixed economy, the fear of nationalization discourages the private entrepreneurs in their business operations.

Two Sector Model:
It is for simple economy with households and firms
Three Sector Model:
It is for mixed and closed economy with households, firms and government.
Four Secto Model:
It is for an open economy with households, firms, government and rest of the world.

Functioning of an Economy based on Activities

(i) Private Ownership of Property and Law of Inheritance:
The basic feature of capitalism is that all resources namely, land, capital, machines, mines etc. are owned by private individuals. The owner has the right to own, keep, sell or use these resources according to his will. The property can be transferred to heirs after death.
(ii) Freedom of Choice and Enterprise:
Each individual is free to carry out any occupation or trade at any place and produce any commodity. Similarly, consumers are free to buy any commodity as per their choice.
(iii) Free Competition:
There is free competition in both product and factor market. The government or any authority cannot prevent firms from buying or selling in the market. There is competition between buyers and sellers.

Macro economics suffers from certain limitation. They are
(i) There is a danger of excessive generalisation of the economy as a whole.
(ii) It assumes homogeneity among the individual units.
(iii) There is a fallacy of composition. What is good of an individual need not be good for nation and viceversa and, what is good for a country is not good for another country and at another time.

(i) Lack of Coordination: The greatest drawback of mixedism is lack of coordination between public sector and private sector. As both work with divergent motives, it creates many coordination related problems.
(ii) Competitive Attitude: It is expected that both government and private should work with a complementary spirit towards the welfare of the society, but in reality they are competitive in their activities.
(iii) Inefficiency: Most of the public sector enterprises remain inefficient due to lethargic bureaucracy, red tapism and lack of motivation.
(iv) Fear of Nationalization: In a mixed economy, the fear of nationalization discourages the private entrepreneurs in their business operations and innovative initiatives.
(v) Widening Inequality: Ownership of resources, laws of inheritance and profit motive of people widens the gap between rich and poor.

i) Reduction in inequalities:
No one is allowed to own and use private property to exploit others.
ii) Ab nee of class conflicts:
As inequalities are minimum, there is no conflict between rich and poor class. Society functions in a harmonious manner.

i) Class Struggle:
Capitalism leads to class struggle as it divides the society into capitalists and workers.
ii) Business Cycle:
Free Market System leads to frequent violent economic fluctuations and crisis.

(i) Concentration of wealth and income
(ii) Wastage of Resources
(iii) Class struggle
(iv) Business cycle
(v) Production of non essential goods.