Basic Economic Entities

What are the two main functions of an economy?

• To produce goods and services to satisfy human wants.

• To maintain a system of mutual exchange between entities.

• To provide employment opportunities to people.

• To solve problems related to production consumption and distribution.

Select the the only way in which fiscal policy helps our country

• Balancing the export and import of commodities.

• controlling inflation.

• controlling and regulating the supply of money and availability of credit.

• decreasing capital accumulation.

State the correct factor of production with its form of income generation.

• Land-Rent

• Labour-Profit

• Capital-Wages

• Organisation-Interest.

To raise the rate of investment is an Indirect role of a government.

• True

• False

How can the state check the concentration of economic power in a few hands?

• Nationalization of Industries

• Through progressive tax system.

• Through its expenditure policy.

• Through Demonetization

Under basis of nature of consumption consumers may be classified as

• Direct Consumers

• Indirect Consumers

• Tertiary consumers

• Modern Consumers

• Consumers by exchanging goods.

Households offer_________________ to the firms and recieve rewards in cash or kind for the services rendered.

Firms play a dual role.

• True

• False

When price increases purchasing power____________.

• decreases

• increases

• remains constant

Which main activities does an economic entity perform?

• Acquiring assets or to obtain their ownership right.

• Taking up responsibilities and incur liabilities

• participating in economic activities.

• undertaking transactions with other economic entities in the economy.

• maintaining a system of co-operation among producers.