IGCSE Economics Paper-1: Specimen Questions with Answers 58 - 58 of 64

Question 58

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Question

Match List-Ⅰ List-Ⅱ▾

Match the following

List-Ⅰ (Column-I)List-Ⅱ (Column-II)
(A)
Socialist
(i)
Essential and Monopolies, Government
(B)
Capitalist
(ii)
Government ownership
(C)
Communist
(iii)
Private ownership

Choices

Choice (4)
  • (A)
  • (B)
  • (C)
a.
  • (i)
  • (ii)
  • (iii)
b.
  • (i)
  • (iii)
  • (ii)
c.
  • (iii)
  • (ii)
  • (i)
d.All of the above

Answer

b.

Explanation

Economic system refers to the way resources are distributed within an economy. There are four types of Economic system:

  • Traditional Economy: it is the most traditional form of economy in the world. It exists in some parts of the world these areas tend to be rural, second or third world, which closely function through farming. These societies tend to be closely knit and the people are socially satisfied.
  • Command/Socialist Economy: In this economy, a large part is controlled by centralized power. Example- USSR where the government has the authority to make decisions. The government owns all the major industries like utilities, aviation, arms and ammunition, railroad etc.
  • Capitalist/Market Economy: Free market economy is the opposite of Socialist economy where the central government gets to keep the profits. In free market, firms and households act in their interest to know how the resources are allocated, what goods are produced, and who buys the goods. Example- Hong Kong.
  • Mixed Economy- A mixed economy is a combination of different types of economic systems. It is cross of both Capitalist and socialist economy. In this system, the market is free of government intervention except for few main areas like railway and defense. Example- India.

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