Question : Assertion: A mixed economy combines elements of both market and command economies.
Reason: In a mixed economy, the government intervenes to correct market failures and ensure equitable distribution of resources.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion is true. In a mixed economy, there is a combination of private enterprise and government intervention. The market mechanism plays a significant role in resource allocation, production, and pricing, while the government also intervenes to correct market failures and promote social welfare.
The reason provided is a correct explanation of the assertion. One of the primary roles of government in a mixed economy is to address market failures, such as externalities, monopolies, and information asymmetry. The government may regulate certain industries, provide public goods, implement social welfare programs, and establish policies to promote equitable distribution of resources.
Therefore, the correct answer is Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Question : Assertion: Mixed economy combines elements of both market and command economies.
Reason: Mixed economies rely solely on government intervention to allocate resources effectively.
Question : Assertion: Command economy is characterized by central planning and government control over resources.
Reason: Command economies allow for individual decision-making and private ownership of businesses.
Question : Assertion: Market economy is characterized by decentralized decision-making and private ownership of resources.
Reason: Market economies rely on government intervention to allocate resources efficiently.
Question : Assertion: A command economy is characterized by central planning and government control over resource allocation.
Reason: In a command economy, prices are determined by the government to achieve economic stability.
Question : Assertion: A market economy is characterized by decentralized decision-making by households and firms.
Reason: In a market economy, the forces of supply and demand determine prices and allocate resources.
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