24-02-2022

Planning vs Market
Economy.

Q 1 :- Which of the following is a feature of a Laissez-Faire economy?

A. The customers take all the decisions regarding production of all the
commodities

B. The Government does not interfere in the free functioning of demand and
supply forces in the market

C. The producer alone takes all the decisions for price-determination of

various commodities produced.

D. The Government controls the allocation of all the factors of production

In a Laissez-Faire economy(free economy) the government does not interfere in the market
mechanism of an economy and allows the free play of demand and supply forces .Thus the
market works accordingly the two market forces.

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Q 2 :- Which of the following statements is not applicable to the capitalist

economic system?

A. Economic system is based on large production

B. Means of production are owned by Government

C. Economic system is based on huge exchange

D. Only to get maximum profit is the objective

Q 3 :- Which one of the following is NOT a feature of mixed economy?

A. Market forces deciding investment and consumption

B. Reservation of certain areas for public sector investment

C. Emphasis on social justice

D. Strong anti-monopoly legislature

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Q 4 :- Price mechanism is a feature of______.

A. capitalist economy

B. mixed economy

C. socialist economy

D. Both a & b

 Price mechanism refers to the system where the forces of demand and
supply determine the prices of commodities and the changes therein. It is
the buyers and sellers who actually determine the price of a commodity.

Q 5 :- Mixed economy means an economy where ___________.

A. both agriculture and industry are equally promoted by the state.

B. there is co-existence of private sector along with the public sector.

C. there is importance of small scale industries along with heavy industries.

D. economy is controlled by military as well as civilian rulers.

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Q 6 :- What does consumer's sovereignty means?

A. Consumers have the power to manage the economy

B. Consumer's expenditure influence the allocation of resources

C. Consumer goods are free from government control

D. Consumers are free to spend their income as they like

Q 7 :- Which type of economy gives rise to the most efficient allocation of

resources and capital in the standard micro economics framework?

A. Command market economy

B. Controlled market economy

C. Free market economy

D. Regulated market economy

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Q 8 :- In a socialist economy, the concept of consumer sovereignty is _________.

A restricted  In a socialist economy, the concept of consumer

sovereignty is restricted as the government plays a
comprehensive role in almost all economic activities,
B unrestricted such as production, distribution, and consumption, of a
nation.

C recognized  In a socialist economy, not only the ownership of

private property is allowed to a limited amount, but the
concept of a free-market mechanism is also eliminated.
D none of the above
 The private ownership of resources, in a socialist
economy, is changed by state ownership. In addition, in
a socialist economy, the government plans and
regulates all the economic activities centrally at a state
level.

 In a socialist economy, an individual’s decisions are

totally dependent on the limit decided by the
government

Q 9 :- Which of the following applies to a Socialist Economy?

A. Private ownership of all resources and factors of production

B. Total absence of Government regulation

C. Balancing between social objectives and economic objectives of the society

D. Market mechanism to solve all central problems of the economy

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Q 10 :- Which of the following is not the feature of socialist economy?

A Economic planning

B Social welfare

C Private ownership of productive resources

D Collective ownership

Q 11 :- Which economy is also known as the ‘Capitalist Economy’? JSA

(A) Mixed economy

(B) Centrally planned economy

(C) Socialist economy

(D) Market economy

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Q 12 :- The main reason for India’s indicative economic planning was

______. JSA

(A) the presence of the socialist economy

(B) very high levels of unemployment

(C) the presence of the capitalist economy

(D) the presence of the mixed economy

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Q 13 :- In which economy, private sector has the freedom to choose its line
of production but the government keeps a close watch on its activities?
JSA

(A) Socialist economy

(B) Capitalist economy

(C) Mixed economy

(D) Market economy

Q 14 :- Which of the following recognizes and protects ‘property rights’?

(A) Command economy

(B) Market economy

(C) Developing economy

(D) Planning economy

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Q 15 :- The basic difference between imperative and indicative planning is that

________

A. in the case of indicative planning there is no need to nationalize any industry.

B. in the case of imperative planning all economic activities belong to public

sector, while in the other type they belong to the private sector.

C. it is easier to achieve targets in imperative type of planning.

D. in the case of imperative planning market mechanism is entirely replaced by

a command hierarchy, while in case of indicative planning it is looked upon as a
way to improve the functioning of market system.

Q 16 :- The concept of socialist economy was propounded by…….

(A) Karl Marx and Frederic Engels.

(B) Marshall

(C) J.B Say

(D) Joel Dean

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Q 17 :- Under which ‘Five Year Plan’ was the decision to establish a socialistic
pattern of society taken?

(A) First Five Year Plan

 It was made for the duration of 1956 to 1961,
(B) Second Five Year Plan under the leadership of Jawaharlal Nehru. It
was based on the P.C. Mahalanobis
(C) Third Five Year Plan Model made in the year 1953.

(D) Fourth Five Year Plan

Q 18 :- During which Five Year Plan was the Emergency claimed, new elections
took place and the Janta Party was elected?

(A) Third (B) Fourth (C) Fifth (D) Sixth

 Emergency was clamped in 1978. This was during the Fifth five year plan
when Janata party led by Morarji Desai came to power. It terminated the
five year plan and implemented the Rolling plan instead in which the
targets could be revised as per the demands of the economy. It was unlike
the five year plan which had fixed targets.

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Q 19 :- The Plan Holiday refers to the period

(A) 1955-68 (B) 1990-92 (C) 1966-69 (D) 1978-80

 Annual Plans from 1990-1992 because the

eighth Five Year Plan could not take place
due to the volatile political situation at the
center

Q 20 :- Which Five Year Plan in India gave emphasis on co-operative Federalism?

(A) Ninth Five Year Plan

(B) Tenth Five Year Plan

(C) Eleventh Five Year Plan

(D) Twelfth Five Year Plan

• 1B 2B 3A 4A 5B 6D 7C 8A 9C 10C 11D 12D 13C

14B 15D 16A 17B 18C 19C 20A

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•1951-56 - 1st Plan - Focus on Agriculture ✔1956-61 - 2nd Plan - Focus on Industry
based on the Harrod-Domar model with a few modifications.

•1961-66 - 3rd Plan - Self Sufficiency in food grains ✔1966-69 - Plan Holiday - Due to
also called ‘Gadgil Yojna’ failure of 3rd Plan
•1969-74 - 4th plan - Growth, Stability Self reliance ✔1974-79 - 5th plan - Garibi Hatao

• 1978 - Rolling Plan ✔1980-85 - 6th Plan - Comprehensive Growth

•1985-90 - 7th Plan - Food grain production, Jawahar Rozgar Yojana

•1992-97 - 8th Plan - Economic reforms

•1997-2002 - 9th Plan - Developing Basic Minimum ✔ 2002-2007 - 10th Plan - 8% GDP growth
Services, Empowerment of women

•2007-2012 - 11th Plan - Towards faster & more inclusive growth ✔2012-2017 - 12th Plan -
8% GDP growth

National Development Council (NDC):

•National Development Council (NDC) was formed on 6th August, 1952.
Its goal is to create co-operative environment for economic planning among the states and Planning
Commission.
Gandhian Plan 1944:- It was enunciated by Acharya Shriman Narayan Agarwal in his
‘Gandhian Plan’ in 1944.
 The basic objective of the Gandhian Model is to raise the material as well as the cultural
level of the masses so as to provide a basic standard of life.

 It laid emphasis on the scientific development of agriculture and the rapid growth of
cottage and village industries.
 Moreover, Gandhian Strategy emphasized employment-oriented planning rather than
the production-oriented planning of Nehru

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