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What is the primary function of Public Sector Undertakings (PSUs) in a mixed economy?
What is the primary function of Public Sector Undertakings (PSUs) in a mixed economy?
Which sector does an individual, like Mukesh Ambani, belong to?
Which sector does an individual, like Mukesh Ambani, belong to?
What is the primary characteristic of a command economy?
What is the primary characteristic of a command economy?
What is the primary function of the private sector in a mixed economy?
What is the primary function of the private sector in a mixed economy?
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Which sector includes exports and imports of goods and services?
Which sector includes exports and imports of goods and services?
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What is the characteristic of a market economy?
What is the characteristic of a market economy?
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What is the relationship between a person and a company in the context of the household sector?
What is the relationship between a person and a company in the context of the household sector?
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What is the primary function of the government sector in a mixed economy?
What is the primary function of the government sector in a mixed economy?
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In a command economy, who decides how the output of the society is to be divided among different people?
In a command economy, who decides how the output of the society is to be divided among different people?
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What is the primary characteristic of a mixed economy?
What is the primary characteristic of a mixed economy?
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In a market economy, who answers the major economic questions of what, how, and for whom?
In a market economy, who answers the major economic questions of what, how, and for whom?
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What is the primary role of the government in a mixed economy?
What is the primary role of the government in a mixed economy?
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What sector of the economy includes public administration, police, and defence?
What sector of the economy includes public administration, police, and defence?
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What is the primary characteristic of a command economy?
What is the primary characteristic of a command economy?
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What is the primary function of the private sector in a mixed economy?
What is the primary function of the private sector in a mixed economy?
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What type of economy operates at the opposite end of the spectrum from a command economy?
What type of economy operates at the opposite end of the spectrum from a command economy?
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What is the outcome when the household sector saves Rs. 30 in the economy?
What is the outcome when the household sector saves Rs. 30 in the economy?
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In the given scenario, what is the relationship between savings and investment?
In the given scenario, what is the relationship between savings and investment?
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What type of goods are produced by the enterprises in the private sector?
What type of goods are produced by the enterprises in the private sector?
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What is the outcome when an economy wants to produce more goods and services?
What is the outcome when an economy wants to produce more goods and services?
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What is the role of the household sector in the economy?
What is the role of the household sector in the economy?
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What is the outcome when the private sector borrows Rs. 30 from banks?
What is the outcome when the private sector borrows Rs. 30 from banks?
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What is the characteristic of an economy that wants to grow?
What is the characteristic of an economy that wants to grow?
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What happens when an economy saves more?
What happens when an economy saves more?
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Study Notes
Four Sectors of Economy
- A mixed economy is divided into four sectors: private sector, government sector, household sector, and external sector.
Government Sector
- The government sector includes public administration, police, defense, framing of laws, and enforcing them.
- It also undertakes production activities through its companies, such as Coal India Ltd. (CIL) and National Thermal Power Corporation (NTPC).
- All companies owned by the Central or State Governments are considered Public Sector Undertakings (PSUs) and belong to the government sector.
Household Sector
- A household consists of a group of persons who normally live together and take food from a common kitchen.
- The size of a household is the total number of persons in the household.
- Households consist of people who work in firms as workers, earn wages, and are also owners of firms and earn profits.
- All human beings (population) belong to the household sector.
Private Sector
- The private sector includes all firms or enterprises owned by private individuals or entrepreneurs.
- The basic function of private sector is the production of output, i.e., goods and services.
- In a command economy, the government owns most of the means of production, but in a mixed economy, most decisions are made in the market place.
External Sector
- The external sector consists of the exports and imports of goods and services flowing into the country or out of the country.
- It also includes the financial flows from and into the domestic country.
Savings and Investment
- If the household sector saves more, the enterprises will produce more capital goods.
- Savings are equal to the production of capital goods in the economy (when there is no government and external sector).
- Higher savings lead to higher production of capital goods, which in turn propels the economy on a higher growth path.
- Savings are equal to investment, and higher savings lead to higher investment.
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Description
This quiz covers the roles of the government sector in the economy, including production activities through public sector undertakings, and the definition of the household sector.
