Skip to content

CA Foundation · Business Economics · Nature and Scope of Business Economics

Which of the following is a defining feature of a mixed economy such as India's?

A mixed economy has both public and private sectors, and the price mechanism works alongside government regulation and intervention. It is neither wholly state-owned like socialism nor wholly free of government like pure capitalism. India is the standard example.

  1. AOnly the government owns all means of production
  2. BPublic and private sectors coexist, with the price mechanism operating alongside government regulationCorrect
  3. CResource allocation is decided entirely by tradition
  4. DThere is no role for government in production or pricing

Explanation

A mixed economy combines features of capitalism and socialism: private enterprise and market prices function, while the government owns enterprises and regulates in the public interest. Total state ownership describes socialism, and no government role describes pure capitalism.

Did you get it right without looking?

One question tells you little. A timed set on Nature and Scope of Business Economics shows your real accuracy, how long you take and where you lose marks.

Practise Nature and Scope of Business EconomicsFree diagnostic mock

More Nature and Scope of Business Economics questions