Tag: economics

Questions Related to economics

The government in a mixed economy seeks to control price mechanism through which of the following policies?

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. Industrial policy

  2. Fiscal policy

  3. Monetary policy

  4. All of the above

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Correct Option: D
Explanation:

In a mixed economy, price mechanism are intervened by the government through many policies which includes industrial policy i.e. industrial acts, wage rate system etc, fiscal policy i.e. taxation policy on goods and services, and monetary policy i.e. central bank's qualitative and quantitative policy.

_______________ price mechanism operates in a socialist economy.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. Administered

  2. Open

  3. Free

  4. Support

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Correct Option: A
Explanation:

In a socialist economy, the price mechanism i.e. price affects the demand and supply of the commodities is directed by a centrally based planning authority that controls the price mechanism to certain limits and regulates it to protect civilians from fraudulent practices.

'From each according to his capacity and to each according to his work' is the principle of ___________, in a socialist economy.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. distribution of utilities

  2. distribution of income

  3. employment segregation

  4. wealth distribution

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Correct Option: B
Explanation:
In a socialist economy, the central problems of the economy is solved by a centrally based planning authority that resolves all the centrally based problems related to production of goods and services in the economy which includes the problem of 'For whom to produce?' is decided by allocating resources for the production keeping in mind the purchasing power of the nation according to their capacity and income earned and spent by them. 

The role played by price mechanism in a free-enterprise economy is taken up by the ___________ in a socialist economy.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. state governments

  2. central bank

  3. fiscal regulatory authority

  4. central planning authority

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Correct Option: D
Explanation:

In a socialist economy, the price mechanism i.e. price affects the demand and supply of the commodities is directed by a centrally based planning authority that controls the price mechanism to certain limits and regulates it to protect civilians from fraudulent practices.

The decision regarding distribution of income is taken by the planning authority in a capitalist economy.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. True

  2. False

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Correct Option: B
Explanation:

Capitalist economies has private ownership where utilization of resources takes place for private gains, therefore here decision regarding the distribution of income and wealth is taken on the basis of the purchasing power of an individual where the private investors gain the maximum. 

The public sector under a mixed economy provides __________ so as to promote economic development.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. consumer goods

  2. economic infrastructure

  3. luxury goods

  4. all of the above

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Correct Option: B
Explanation:

In a mixed economy, private decisions are intervened by the government due to which all the major economic decisions related to economic development is taken by the government i.e. public sector which includes economic infrastructure, development of health and education etc. 

Under mixed economy framework, free markets and price mechanism operate under the control and regulation of the government.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. True

  2. False

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Correct Option: A
Explanation:

In a mixed economy, private decisions are intervened by the government due to which there is problem in price mechanism where prices of a commodities are determined by the forces of demand which involves consumers and supply which involves producers and labours with exception set by government on some basic commodities. 

The government in a mixed economy controls production in _________  as well as _________ sector so as to ensure adequate availability of necessities.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. primary, industrial

  2. public, private

  3. banking, agricultural

  4. public, construction

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Correct Option: B
Explanation:

In a mixed economy both private as well as public enterprises utilize the resources for the production of goods and services in  the economy for personal as well as social gains where government audits the overall production to ensure adequate availability of goods and services in the economy. 

The basic economic problems are solved in the public sector of a mixed economy through decision making by the planning authority.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. True

  2. False

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Correct Option: A
Explanation:

In a mixed economy, the public sector price mechanism i.e. price affects the demand and supply of the commodities is directed by a centrally based planning authority that controls the price mechanism to certain limits and regulates it to protect civilians from fraudulent practices.

In the private sector of a mixed economy, ____________ plays an important role in solving the basic economic problems.

economics solution to basic economic problems under different economic systems supply curve and price determination in the market price mechanism and solutions supply

  1. price mechanism

  2. planning authority

  3. government

  4. consumers

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Correct Option: A
Explanation:

In a private sector of a mixed economy, price mechanism takes a very prominent role as in such sectors price directs the flow of goods and services in the market as it directs the supply by the production sector i.e supply will increase if price increases and vice-versa and purchase by the demand sector i.e demand will increase if price decreases and vice-versa.