A mixed economy is an economic system where the means of production and distribution of goods and services are in the hands of both the state and the private sector. A mixed economy with a free market leaning is one where the means of production and distribution of goods and services are substantially owned and controlled by the private sector. In this type of economy, the basic economic questions of what to produce, how to produce and for whom to produce are answered by both the state and substantially by the price system.
Command economy is an economic system where the state owns and control all non-labor means of production and distribution of goods and services. In this type of economy, the basic economic questions of what to produce, how to produce and for whom to produce are answered by the state through a central planning committee.
Lowering tax to encourage corn product export in a mixed economy of a free market leaning will encourage producers and make the country’s export more attractive to the international community. This cannot be true of a command economy because the citizens are not in control of the non-labor productive resources, it is the government
A substantial understatement may occur when tax return is understated by an amount greater than 10% of the tax required to be shown on the tax return.
Example: If a tax payer that is suppose to report a $6000 tax due and choose to report a $2000 instead, to know if a penalty will be charged or not it has to be greater than 10% of the amount which is suppose to be reported (i.e $6000 x 10% = 600) . therefore in the case shown above the penalty will be applied
