Explanation:

Mixed Economy
The belief in the self-correcting quality of the market and the ‘invisible hand’ of Adam Smith got a major setback in early 20th century during the Great Depression (1929). The impact of the depression spread from the USA to other economies of Western Europe escalating large scale unemployment, downfall in demand and economic activities and lockouts in industrial enterprises. The prevailing Smithonian macro ideas failed to check the crisis. A new approach was needed which came in the famous work, The General Theory of Employment, Interest and Money (1936) by the English economist at Cambridge University, John Maynard Keynes (1883–1946).
Keynes questioned the very principles of ‘laissez-faire’ and the nature of the ‘invisible hand’.
He even opined that the invisible hand brings equilibirium to the economy but by ‘strangulating the poor’. He suggested that prices and wages are not flexible enough to provide employment to all. It means there will be some people unemployed when the economy will be at its full potential. Ultimately, a fall in demand will be imminent resulting in recession and if unchecked, in depression which happened in 1929. Questioning the limitations of the market mechanism, Keynes suggested strong government intervention in the economy. To get the economy out of the depression, he suggested an increase in government expenditures, discretionary fiscal policy (fiscal deficit, lower interest rates, cheap money supply, etc.) to boost the demand of goods and services as this was the reason behind the depression. As Keynesian policies were followed, the concerned economies were successfully pulled out of the Great Depression.
On the margins of these developments, it is interesting to note the developments that occurred in the state economies of the time. It was Oscar Lange (1904–65), the Polish philosopher, who in 1950s suggested the same things for the socialist economy as Keynes had suggested for the capitalist economy. Lange praised the state economy for many of its good things, but also suggested inclusion of some of the good things of the capitalistic economy. He advised the state economies to adopt ‘market socialism’ (the term was coined by him). Hence, both statement 1 and 2 are incorrect.