Economic Systems: Types and Characteristics
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Economic Systems: Types and Characteristics

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Questions and Answers

In a market economy, what determines which consumer goods are produced?

  • The market forces of supply and demand (correct)
  • The government's directives
  • The needs of the society
  • The quantity of raw materials available
  • What determines whether more human labor or more capital is used for production in a market economy?

  • The availability of skilled workers
  • The preferences of the producers
  • The government's regulations
  • Whether labor is cheaper than capital (correct)
  • How are goods and services distributed in a capitalist society?

  • Based on governmental policies
  • Based on purchasing power (correct)
  • Based on people's needs
  • Equally among all citizens
  • Why might low-cost housing for the poor not be produced in a market economy?

    <p>Because it's not in demand</p> Signup and view all the answers

    What is the basis for distributing goods among people in a capitalist society?

    <p>Purchasing power</p> Signup and view all the answers

    What type of economy relies on supply and demand to determine the production of goods?

    <p>Market economy</p> Signup and view all the answers

    In a socialist society, who decides what goods are to be produced?

    <p>The government</p> Signup and view all the answers

    What is the basis of distribution in a socialist society?

    <p>People's needs</p> Signup and view all the answers

    What does a socialist society provide to all its citizens, unlike under capitalism?

    <p>Free health care</p> Signup and view all the answers

    Which statement is true about a socialist society's view on private property?

    <p>It has no private property since everything is owned by the state</p> Signup and view all the answers

    What type of economy involves both the government and the market in answering economic questions?

    <p>Mixed economy</p> Signup and view all the answers

    According to the passage, who is considered to know what is good for the people in a socialist society?

    <p>The government</p> Signup and view all the answers

    What principle is distribution under socialism supposed to be based on?

    <p>What people need</p> Signup and view all the answers

    What type of economy does Cuba have, according to the passage?

    <p>Socialist economy</p> Signup and view all the answers

    Which economic system provides free health care to all its citizens?

    <p>Socialist system</p> Signup and view all the answers

    Who provides essential goods and services in a mixed economy when the market fails to do so?

    <p>The government</p> Signup and view all the answers

    What were the specified goals of the five year plans in India?

    <p>Growth, modernization, self-reliance, and equity</p> Signup and view all the answers

    What does 'growth' refer to in the context of the five year plans?

    <p>Increase in the country's capacity to produce goods and services</p> Signup and view all the answers

    What was the role of the Planning Commission set up in 1950?

    <p>To specify goals for the five year plans</p> Signup and view all the answers

    How did the limited resources impact the choice of goals in each plan?

    <p>It made it necessary to prioritize certain goals over others</p> Signup and view all the answers

    Who is regarded as the architect of Indian planning?

    <p>Prasanta Chandra Mahalanobis</p> Signup and view all the answers

    Where was Prasanta Chandra Mahalanobis educated?

    <p>Presidency College, Calcutta and Cambridge University, England</p> Signup and view all the answers

    Which organization did Prasanta Chandra Mahalanobis establish in Calcutta?

    <p>Indian Statistical Institute (ISI)</p> Signup and view all the answers

    What was the share of the service sector in India's GDP by 1990?

    <p>40.59%</p> Signup and view all the answers

    What is the GDP?

    <p>The market value of all the final goods and services produced in the country during a year</p> Signup and view all the answers

    What milestone marked the onset of globalization in India?

    <p>Post 1991 period</p> Signup and view all the answers

    What does a growing share of the service sector in the GDP indicate for a country’s development?

    <p>Higher levels of development</p> Signup and view all the answers

    What does the author compare the GDP to?

    <p>'A cake' which represents the total goods and services produced in a country</p> Signup and view all the answers

    What organization did Prasanta Chandra Mahalanobis become a Fellow of in 1945?

    <p>Royal Society of Britain</p> Signup and view all the answers

    What did Prasanta Chandra Mahalanobis invite distinguished economists to advise him on?

    <p>India’s economic development</p> Signup and view all the answers

    "Modernisation: To increase the production of goods and services" refers to adopting what?

    <p>New technology</p> Signup and view all the answers

    What structural change indicates higher levels of development for a country?

    <p>A growing share of service sector and declining share of agriculture</p> Signup and view all the answers

    Why did the Soviet farmers pack rotten fruits along with fresh fruits in the same box?

    <p>There was no incentive for them to be efficient.</p> Signup and view all the answers

    What was the reason for the poor performance of the agricultural sector in the Soviet Union, despite the availability of fertile land?

    <p>The absence of ownership and lack of incentive for farmers to be efficient.</p> Signup and view all the answers

    What was the primary reason for India's need to import food from the United States of America?

    <p>Low productivity in the agricultural sector.</p> Signup and view all the answers

    What was the purpose of land ceiling policy in India?

    <p>To promote equity in the agricultural sector by reducing the concentration of land ownership in a few hands.</p> Signup and view all the answers

    What was the impact of abolition of intermediaries on tenants in India?

    <p>It gave tenants incentives to invest in making improvements on the farm.</p> Signup and view all the answers

    What was a challenge faced by land ceiling legislation in India?

    <p>'Loopholes exploited by big landlords to retain their land.'</p> Signup and view all the answers

    What led to the success of land reforms in Kerala and West Bengal?

    <p>'Governments committed to the policy of land to the tiller.'</p> Signup and view all the answers

    What caused stagnation in agriculture during colonial rule in India?

    <p>'Use of old technology.'</p> Signup and view all the answers

    Why were farmers in trouble during a short monsoon season in India?

    <p>'Lack of access to irrigation facilities.'</p> Signup and view all the answers

    What was the key factor that broke the stagnation in agriculture during colonial rule in India?

    <p>'Introduction of green revolution.'</p> Signup and view all the answers

    Why did some states like Kerala and West Bengal have better success with land reforms compared to other states?

    <p>Due to governments committed to the policy of land to the tiller.</p> Signup and view all the answers

    What refers to the increase in food grain production from the use of high yielding variety (HYV) seeds?

    <p>Green revolution</p> Signup and view all the answers

    What was vital for the application of high yielding variety (HYV) seeds?

    <p>Use of fertiliser and pesticide in correct quantities, regular supply of water, and correct proportions</p> Signup and view all the answers

    In which phase of the green revolution did the high yielding variety (HYV) technology spread to a larger number of states and benefit more variety of crops?

    <p>Second phase (mid-1970s to mid-1980s)</p> Signup and view all the answers

    What does the portion of agricultural produce sold in the market by the farmers refer to?

    <p>Market surplus</p> Signup and view all the answers

    What did the green revolution enable India to achieve in terms of food grains?

    <p>Self-sufficiency in food grains</p> Signup and view all the answers

    What was a risk associated with high yielding variety (HYV) crops during the green revolution?

    <p>Pest attacks and vulnerability for small farmers</p> Signup and view all the answers

    What steps did the government take to reduce the risk for small farmers adopting high yielding variety (HYV) technology?

    <p>Subsidizing fertilisers and providing loans at a low interest rate</p> Signup and view all the answers

    Who did the green revolution benefit besides rich farmers?

    <p>'Small farmers and rich farmers'</p> Signup and view all the answers

    What is a hotly debated question according to the passage?

    <p>Use of subsidies in agriculture</p> Signup and view all the answers

    What was generally agreed as necessary for adoption of new high yielding variety (HYV) technology by farmers?

    <p>Subsidies and incentives for small farmers</p> Signup and view all the answers

    What did the government provide to reduce the risk of small farmers being ruined by pest attacks on their crops?

    <p>Low interest rate loans and subsidized fertilisers</p> Signup and view all the answers

    What would have favored rich farmers only if the state did not play an extensive role according to the passage?

    <p>Green revolution technology</p> Signup and view all the answers

    Why do some economists believe that subsidies should be phased out once technology is widely adopted?

    <p>To stop the burden on the government's finances</p> Signup and view all the answers

    Why do some experts argue for the government to continue with agricultural subsidies?

    <p>To support poor farmers who cannot afford inputs</p> Signup and view all the answers

    What do some economists believe is the negative impact of subsidies on resources like water and electricity?

    <p>They lead to wasteful use of resources</p> Signup and view all the answers

    Why did a large proportion of the population remain engaged in agriculture in India from 1950 to 1990?

    <p>Because agricultural output could have grown with much less people working in the sector</p> Signup and view all the answers

    How do prices act as signals in the market according to the text?

    <p>Prices indicate the supply of goods</p> Signup and view all the answers

    What happens when electricity and water are provided at a subsidized rate or free according to some economists?

    <p>Wasteful use of resources increases</p> Signup and view all the answers

    Why is it argued that there is no case for continuing with fertiliser subsidies?

    <p>Because they put a huge burden on government finances</p> Signup and view all the answers

    What is the achievement mentioned in the text related to Indian agricultural productivity?

    <p>Sufficient increase in food grain production</p> Signup and view all the answers

    According to some experts, what could be a consequence of eliminating subsidies for poor farmers?

    <p>Potential violation of equity goals</p> Signup and view all the answers

    What is emphasized as a potential consequence of not allowing prices to indicate the supply of goods?

    <p>Wasteful use of resources</p> Signup and view all the answers

    What do some economists believe is the reason behind a large proportion of GDP still being contributed by agriculture despite a decline in its proportion?

    <p>Increase in population depending on agriculture</p> Signup and view all the answers

    What do some experts believe is the potential impact of eliminating subsidies for poor farmers?

    <p>Increase in inequality between rich and poor farmers</p> Signup and view all the answers

    What does modernisation refer to in the context of the passage?

    <p>Adoption of new technology and changes in social outlook</p> Signup and view all the answers

    What is the significance of self-reliance in promoting economic growth and modernisation?

    <p>It reduces the vulnerability of a nation's sovereignty to foreign interference</p> Signup and view all the answers

    What is the importance of equity in the context of economic development?

    <p>Ensuring that the benefits of economic prosperity reach the poor as well</p> Signup and view all the answers

    How did the policy makers of independent India address issues in the agricultural sector after independence?

    <p>By introducing land reforms and promoting the use of ‘High Yielding Variety’ (HYV) seeds</p> Signup and view all the answers

    What was the main objective of the policy of 'land to the tiller'?

    <p>To provide incentives to cultivators for increasing output</p> Signup and view all the answers

    In a traditional society, what is the role expected of women?

    <p>To remain at home while men work</p> Signup and view all the answers

    What did the first seven five year plans in India attempt to attain?

    <p>Growth, modernisation, and equity only</p> Signup and view all the answers

    What is the significance of ownership in providing incentives to cultivators?

    <p>Ownership enables cultivators to make profit from increased output</p> Signup and view all the answers

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