Economic Systems and Market Structures CDS Questions

CDS Economy

Economic Systems and Market Structures MCQ Questions


13.
Which of the following is a major demerit of a centrally planned (socialist) economy?
A.
Wide income inequalities
B.
Lack of incentive and bureaucratic inefficiency
C.
Recurrent trade cycles
D.
Excessive advertising and product duplication
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ANSWER :
B. Lack of incentive and bureaucratic inefficiency
14.
Freedom of choice of occupation and freedom of enterprise are most restricted in a
A.
Capitalist economy
B.
Socialist (command) economy
C.
Mixed economy
D.
Free-market economy
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ANSWER :
B. Socialist (command) economy
15.
Trade cycles (alternating periods of boom and depression) are typically associated with which economic system?
A.
Socialist economy
B.
Traditional economy
C.
Command economy
D.
Capitalist economy
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ANSWER :
D. Capitalist economy
16.
Which of the following correctly states the role of government in a laissez-faire capitalist economy?
A.
It plays a minimal role, mainly maintaining law, order and defence
B.
It owns all factories and farms
C.
It plans the entire economy
D.
It fixes all prices and wages
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ANSWER :
A. It plays a minimal role, mainly maintaining law, order and defence
17.
In a mixed economy, the public sector usually concentrates on
A.
Production of luxury consumer goods
B.
Retail trade and small shops
C.
Basic and heavy industries, infrastructure and public utilities
D.
Only agriculture
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ANSWER :
C. Basic and heavy industries, infrastructure and public utilities
18.
Which feature is common to BOTH capitalist and socialist economies?
A.
Private ownership of capital
B.
Absence of government
C.
Central planning
D.
They both face the central problems of scarcity and choice
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ANSWER :
D. They both face the central problems of scarcity and choice