Online Test — Types of Economies
15 Questions • 15 min • Chapter MCQ
15:00
Question 1 of 15
The way a country organises to answer the central problems is its:
Economic system
Budget
Tax
Market
Explanation: That organisation is the economic system.
Question 2 of 15
The three main types of economy are capitalist, socialist and:
Mixed
Foreign
Closed
Digital
Explanation: The three types are capitalist, socialist and mixed.
Question 3 of 15
In a capitalist economy, resources are:
State owned
Privately owned
Unowned
Owned abroad
Explanation: Capitalism is based on private ownership.
Question 4 of 15
In a capitalist economy, decisions are guided by the:
Central plan
Price mechanism
Government only
Foreign aid
Explanation: The price mechanism (demand and supply) guides a market economy.
Question 5 of 15
A major demerit of capitalism is:
Efficiency
Wide inequality
Consumer choice
Innovation
Explanation: Capitalism tends to create wide income/wealth inequality.
Question 6 of 15
In a socialist economy, the means of production are owned by the:
Private firms
State (society)
Foreigners
No one
Explanation: Socialism has state/collective ownership.
Question 7 of 15
Decisions in a socialist economy are taken by:
A central planning authority
The price mechanism
Private firms
Advertisers
Explanation: A central planning authority directs the economy.
Question 8 of 15
The main motive of a socialist economy is:
Profit
Social welfare and equality
Competition
Luxury production
Explanation: Socialism aims at social welfare and equality.
Question 9 of 15
A demerit of socialism is:
Less inequality
Loss of freedom and weak incentives
No exploitation
Stability
Explanation: Socialism can reduce freedom and incentives, causing inefficiency.
Question 10 of 15
An economy combining private and public sectors is a:
Capitalist economy
Socialist economy
Mixed economy
Closed economy
Explanation: A mixed economy has both sectors co-existing.
Question 11 of 15
India is an example of a:
Pure capitalist economy
Pure socialist economy
Mixed economy
Closed economy
Explanation: India is a leading mixed economy.
Question 12 of 15
The USA is mainly an example of a:
Socialist economy
Capitalist economy
Closed economy
Planned economy
Explanation: The USA is a largely capitalist (market) economy.
Question 13 of 15
A developed economy usually has:
High per-capita income
Very low income
Only agriculture
No industry
Explanation: Developed economies have high per-capita income and advanced industry.
Question 14 of 15
A developing economy depends relatively more on:
Agriculture
Space technology
Luxury exports
Foreign aid only
Explanation: Developing economies depend more on agriculture.
Question 15 of 15
The goal of a developing economy is growth with:
Social justice
More inequality
Less output
No planning
Explanation: Developing economies aim at growth with social justice.