Explore topic-wise InterviewSolutions in Current Affairs.

Correct Answer is: (c) Globalism

(c) Four Sector Model

(c) Three Sector Model – firm, household, government

(a) Households and Firms

• In a Four – sector economy, in addition to household, firms and government, a fourth sector namely, external sector is included.
• In real life, only four – sector economy exists. This model is composed of four sectors namely,
• Households
• Firms
• Government
• External sector
• In four – sector economy, expenditure for the entire economy include domestic expenditure (C + I + G) and net exports (X – M).

1. Reduction in Inequalities: No one is allowed to own and use private property to exploit others. 

2. Rational Allocation of Resources: The central planning authority allocates the resources in a planned manner. Wastages are minimised and investments are made in a pre planned manner.

3. Absence of Class Conflicts: As inequalities are minimum, there is no conflict between rich and poor class. Society functions in a harmonious manner. 

4. End of Trade Cycles: Planning authority takes control over production and distribution of goods and services. Therefore, economic fluctuations can be avoided. 

5. Promotes Social Welfare: Absence of exploitation, reduction in economic inequalities, avoidance of trade cycles and increase in productive efficiency help to promote social welfare.

1. Concentration of Wealth and Income: Capitalism causes concentration of wealth and income in a few hands and thereby increases inequalities of income. 

2. Wastage of Resources: Large amount of resources are wasted on competitive advertising and duplication of products.

3. Class Struggle: Capitalism leads to class struggle as it divides the society into capitalists and workers. 

4. Business Cycle: Free market system leads to frequent violent economic fluctuations and crises.

5. Production of non essential goods: Even the harmful goods are produced if there is possibility to make profit.

(a) Capitalistic Economy

(i) is true but (ii) is false

Correct Answer is: (a) 1936

(d) All the above

(c) Production and Consumption

Correct Answer is: (a) Makros

Correct Answer is: (c) Profit

(d) All the above

(d) ‘A’ is false but ‘R’ is true

India is the best example for Mixedism economy.

Correct Answer is: (a) Profit

(b) Capitalistic

Correct Answer is: (a) Free

(a) Macro – Greek word – Makros

1. Macro Economics is the study of the economy as a whole. 

2. In other words, macro economics deals with aggregates such as national income, employment and output. 

3. Macro Economics is also known as ‘Income Theory’.

(b) General Theory

1. An economy is referred to any system or area where economic activities are carried out. Each economy has its own character. Accordingly, the functions or activities also vary

2. An economy, the fundamental economic activities are production and consumption.

1. Inflation refers to steady increase in general price level. 

2. Estimating the general price level by constructing various price index numbers such as wholesale Price. 

3. Index, Consumer Price Index, etc, are needed.

Correct Answer is: (c) Inflation

(c) Micro – very very small

Correct Answer is: (b) Common

(d) micro and macro

Welfare is ignored in Capitalistic Economy.

Status of Development: Developed, underdeveloped, undeveloped and developing economies.

The government has minimum role in Capitalist.

(b) Capitalist

Extreme inequality is prevented in Socialist system.

(b) Capitalist

Market forces have only a limited role to play in Socialist economy.

1. A model is a simplified representation of real situation. 

2. Economists use models to describe economic activities, their relationships and their behaviour. 

3. A model is an explanation of how the economy, or part of the economy, works. 

4. Most economic models are built with mathematics, graphs and equations, and attempt to explain relationships between economic variables.

1. The circular flow of income is a model of an economy showing connections between different sectors of an economy. 

2. It shows flows of income, goods and services and factors of production between economic agents such as firms, households, government and nations. 

3. The circular flow analysis is the basis of national accounts and macroeconomics.

According to Robbins, human needs are infinite and unlimited. For the fulfillment of these requirements, man has limited time and money, so that man needs to make a choice from these wants. Because these means can be used alternatively, so the usefulness of the tools increases and humans have to choose between different needs, due to which the economic difficulty persists forever.

• Excessive emphasis on wealth : In the wealth related definition excessive emphasis is laid on wealth. Wealth has been assumed to be the objective. However, earning wealth is not an end in itself but a means. 
• Hypothesis of economic man is in a appropriate : According to ancient economists, man works on being inspired by wealth or by his selfish interests. However, in fact this thought is erroneous. In fact, humans not only work for money but, man is also inspired by human feelings, such as compassions, love, etc.

According to Marshall the objective of economics is not only the analysis of the nature and the origin of wealth. A more important objective than the creation of wealth is to fulfill our needs through the use of wealth and to increase our physical welfare. Marshall laid more emphasis on the economic welfare of man than on wealth.

According to Professor Marshall, economics is a social science.

Physical resources.

Economic welfare and wealth.

This definition was given by economist Walker.

Correct Answer is: (c) Marshall

Correct Answer is: (c) Robbins

Allahabad University

According to Adam Smith, “Economics is the science of wealth”.

He noticed a tendril of a creeping vine trailing nearby