Answer any five questions: 4 x 3 = 12
15. Describe the different types of Economic Systems?
16. Indicate the Demerits of Socialism?
17. Briefly explain the two sector circular flow model?
18. State the importance of Macro Economics?
Answers
Answer:
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Explanation:
1. There are four different types of Economic Systems; a traditional economy, a marketeconomy, a command economy, and a mixed economy. Each type of economy has its own strengths and weaknesses.
2. Demerits or disadvantages of Socialism are as follows-
.Concentration of Economic and Political Powers in the State. ...
.Lack of initiative on the Part of People. ...
.Reduction of overall Productivity. ...
.Absence of Consumer Sovereignty. ...
.No Occupational Freedom. ...
.Bureaucracy and Red-tapism. ...
.Reduction in efficiency of State enterprise. ...
.Wastage of resource.
3. The circular flow model in the two-sector economy is a hypothetical concept which states that there are only two sectors in the economy, household sector and business sector (business firms). The household sector is the source of factors of production who earn by providing factor services to the business sector.
4. The Importance of Macroeconomics
It helps us understand the functioning of a complicated modern economic system. It describes how the economy as a whole functions and how the level of national income and employment is determined on the basis of aggregate demand and aggregate supply.
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