Unit - 2

The transition from a command economy to a market economy often involves:

• Nationalization of all industries.

• Rapid implementation of price controls.

• Privatization of state-owned enterprises.

• Strengthening central planning agencies.

What is the significance of intellectual property rights in the private sector?

• They restrict innovation and competition.

• They primarily benefit government agencies.

• They provide legal protection for inventions & creative works.

• They are only relevant to public sector research.

Which of the following best describes the concept of "market failure" that justifies government intervention in a mixed economy?

• When businesses consistently make profits.

• When markets fail to allocate resources efficiently or equitably.

• When the government refuses to regulate businesses.

• When consumers refuse to buy products.

Which of the following is often emphasized in socialist economies?

• Individualism

• Collectivism

• Laissez-faire Economics

• Deregulation

Which of the following is a common goal of government intervention in a mixed economy?

• To create monopolies.

• To reduce income inequality.

• To eliminate private property.

• To increase unemployment.

What is the primary motive in a capitalist economy?

• Social welfare

• Profit

• Equal Distribution of Wealth

• Government Control

What is the role of regulatory bodies in the public sector?

• To maximize profits for public enterprises

• To enforce rules and standards within specific industries

• To privatize public assets

• To manage private sector investments

What is a potential disadvantage of a centrally planned socialist economy?

• Overproduction of goods.

• Lack of consumer choice.

• Excessive competition.

• Minimal government intervention.

What is the term for the process of transferring a public sector asset to private ownership?

• Nationalization

• Privatization

• Socialization

• Regulation

What is the difference between "pure capitalism" and "mixed economy"?

• It involves government intervention, while ME does not

• It has no government intervention, while ME includes some government regulation and social programs.

• It focuses on social welfare, while ME prioritizes profit.

• It is centrally planned, while a ME is market-based.