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 (B)</p> Signup and view all the answers

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

<p>Purchasing power (B)</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 (D)</p> Signup and view all the answers

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

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

What is the basis of distribution in a socialist society?

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

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

<p>Free health care (B)</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 (A)</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 (D)</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 (D)</p> Signup and view all the answers

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

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

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

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

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

<p>Socialist system (D)</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 (D)</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 (D)</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 (A)</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 (B)</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 (A)</p> Signup and view all the answers

Who is regarded as the architect of Indian planning?

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

Where was Prasanta Chandra Mahalanobis educated?

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

Which organization did Prasanta Chandra Mahalanobis establish in Calcutta?

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

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

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

What milestone marked the onset of globalization in India?

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

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

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

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

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

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

<p>New technology (D)</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 (C)</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. (C)</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. (B)</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. (D)</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. (B)</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. (A)</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.' (D)</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.' (D)</p> Signup and view all the answers

What caused stagnation in agriculture during colonial rule in India?

<p>'Use of old technology.' (C)</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.' (C)</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.' (C)</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. (D)</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 (A)</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 (D)</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) (A)</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 (B)</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 (A)</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 (A)</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 (B)</p> Signup and view all the answers

Who did the green revolution benefit besides rich farmers?

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

What is a hotly debated question according to the passage?

<p>Use of subsidies in agriculture (C)</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 (D)</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 (A)</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 (D)</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 (A)</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 (D)</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 (D)</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 (B)</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 (B)</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 (C)</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 (B)</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 (D)</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 (D)</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 (A)</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 (C)</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 (C)</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 (B)</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 (D)</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 (D)</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 (A)</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 (B)</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 (B)</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 (C)</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 (D)</p> Signup and view all the answers

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