Question : One of the features of a free market economy is
Option 1: active state intervention
Option 2: public ownership of factors of production
Option 3: rationing and price control
Option 4: consumer's sovereignty
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Correct Answer: consumer's sovereignty
Solution : The correct option is consumer's sovereignty .
A key principle of a free market economy is consumer sovereignty. It means that, depending on their preferences and purchasing behavior, consumers in a market economy ultimately control what commodities and services are produced, and in what amounts. Because they are aware that these are the items and services that will be in demand and bring in profits, producers and sellers are incentivized to create them in a free market. Because of the competition it spurs, consumers can expect higher quality, reduced pricing, and improved features from producers.
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Question : A 'Market Economy' is one in which
Option 1: is controlled by the government
Option 2: is free from the government control
Option 3: is influenced by international market forces
Option 4: All of these
Question : If a consumer's demand for a good moves in the same direction as the consumer's income, the consumer's demand for that good must be inversely related to the price of the good, which is called _____.
Option 1: law of demand
Option 2: law of supply
Option 3: law of substitute
Option 4: law of optimal choice
Question : What is popular sovereignty
Option 1: Sovereignty of peoples representative
Option 2: sovereignty of the legal head
Option 3: sovereignty of the head of state
Option 4: sovereignty of the people
Question : Which one of the following is not an instrument of credit control in India?
Option 1: Rationing of credit
Option 2: Direct action
Option 3: Open market operations
Option 4: Variable cost reserve ratios
Question : In which of the following market forms, a firm does not exercise control over price?
Option 1: Monopoly
Option 2: Perfect competition
Option 3: Oligopoly
Option 4: Monopolistic competition
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