ECONOMICS (CBSE/UGC NET)

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ECONOMICS

ECONOMIC SYSTEMS

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
The military takes over the country of Bom. The new leaders take ownership of all energy resources, which include the natural gas and electric companies. They promise citizens of Bom lower energy prices, because the government will run these industries for the benefit of the people and not for profit. All other industries will remain privately owned. What type of economic system does Bom have?
A
Communism
B
Capitalism
C
Socialism
D
None of the above
Explanation: 

Detailed explanation-1: -Understanding Command Economy. Cuba, North Korea, and the former Soviet Union all have command economies.

Detailed explanation-2: -Capitalism is an economic system characterized by private ownership of the means of production, especially in the industrial sector, with labor paid only wages. Capitalism depends on the enforcement of private property rights, which provide incentives for investment in and productive use of productive capital.

Detailed explanation-3: -Capitalism is often thought of as an economic system in which private actors own and control property in accord with their interests, and demand and supply freely set prices in markets in a way that can serve the best interests of society. The essential feature of capitalism is the motive to make a profit.

Detailed explanation-4: -Economics is the study of how a society uses scarce resources to produce and distribute goods and services. The resources of a person, a firm, or a nation are limited. Hence, economics is the study of choices-what people, firms, or nations choose from among the available resources.

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