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Consider the following statements regarding a purely capitalist economy:
1. It is based on the policy of minimum governmental interference in the economic affairs of individuals.
2. There is no restriction on the ownership of assets and accumulation of wealth.
3. The goods produced are distributed among people on the basis of people's needs.
4. The government coordinates the production decisions of the citizens.
Which of the above statements are not correct?
  • a)
    1 and 2 only
  • b)
    1, 3 and 4 only
  • c)
    3 and 4 only
  • d)
    1, 2, 3 and 4
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Consider the following statements regarding a purely capitalist econom...
  • Capitalism is an economic system in which private individuals or businesses own capital goods. The production of goods and services is based on supply and demand in the general market-known as a market economy-rather than through central planning-known as a planned economy or command economy. The purest form of capitalism is free market or laissez- faire capitalism.
  • In a capitalist economy, the government does not coordinate the production decisions of the citizens. Individuals are free to choose any occupation. The firms are also free to sell their product in the markets of their choice. So, statement 4 is not correct.
  • The capitalist or free enterprise economy is the oldest form of economy. Earlier economists
    supported the policy of 'laissez fair' meaning leaves free. They advocated minimum
    government intervention in economic activities. So, statement 1 is correct.
  • In a capitalist society, the goods produced are distributed among people not on the basis of
    what people need but on the basis of Purchasing Power-the ability to buy goods and
    services. So, statement 3 is not correct.
  • In a capitalist system, all individuals have the right to own property. An individual can acquire property and use it for the benefit of his own family. There is no restriction on iand ownership, machines, mines, factories and to earn profit and accumulate wealth. So, statement 2 is correct.
Therefore, the answer is (c).
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Consider the following statements regarding a purely capitalist econom...
Explanation:

1. Minimum Governmental Interference:
The first statement is correct. A purely capitalist economy is indeed based on the policy of minimum governmental interference in the economic affairs of individuals. This means that the government does not intervene in the market forces of supply and demand.

2. No Restriction on Ownership of Assets:
The second statement is also correct. In a capitalist economy, there are no restrictions on the ownership of assets and the accumulation of wealth. Individuals and businesses are free to own property and accumulate wealth as they see fit.

3. Distribution Based on Needs:
The third statement is incorrect. In a purely capitalist economy, goods are not distributed among people based on their needs. Instead, goods are distributed based on the ability to pay for them. This means that those who can afford to purchase goods and services will receive them, while those who cannot afford them may go without.

4. Government Coordination of Production Decisions:
The fourth statement is also incorrect. In a capitalist economy, the government does not coordinate the production decisions of the citizens. Instead, production decisions are made by individual businesses based on market forces and competition.
Therefore, the correct answer is option C, as statements 3 and 4 are not correct in the context of a purely capitalist economy.
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Directions for the following 8 (eight) items:Read each of the following two passages and answer the items that follow. Your answers to these items should be based on the passages only.Passage-IFor achieving inclusive growth there is-a critical need to rethink the-role of the State. The early debate among economists about the size of the Goverment can be misleading. The need of the hour is to have an enabling Government. India is too large and complex a nation for the State to be able to deliver all that is needed. Asking the Government to produse all the essential goods, create all the necessary jobs, and keep a curb on the prices of all goods is to lead to a large cumbersome bureaucracy and widespread corruption. The aim must be to stay with the objective of inclusive growth that was laid down by the founding fathers of the nation and also to take a more modern view of what the State can realistically deliver. This is what leads to the idea of an enabling State, that is, a Government that does not try to directly deliver to the citizens everything that they need. Instead, it (1) creates an enabling ethos for the market so that individual enterprise can flourish and citizens can, for the most part, provide for the needs of one another, and (2) steps in to help those who do not manage to do well for themselves, for there will always be individuals, no matter what the system, who need support and help. Hence we need a Government that, when it comes to the market, sets effective, incentive-compatible rules and remains on the sidelines with minimal interference, and, at the same time, plays an important role in directly helping the poor by ensuring that they get basic education and health services and receive adequate nutrition and food .Q. According to passage :1. The objective of inclusive growth was laid down by the founding fathers of the nation. 2. Need of the hour is to have an enabling Government.3. The Government should engage in maximum interference in market processes. 4. There is a need to change the size of the Government.

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Consider the following statements regarding a purely capitalist economy:1. It is based on the policy of minimum governmental interference in the economic affairs of individuals.2. There is no restriction on the ownership of assets and accumulation of wealth.3. The goods produced are distributed among people on the basis of peoples needs.4. The government coordinates the production decisions of the citizens.Which of the above statements are not correct?a)1 and 2 onlyb)1, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer?
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Consider the following statements regarding a purely capitalist economy:1. It is based on the policy of minimum governmental interference in the economic affairs of individuals.2. There is no restriction on the ownership of assets and accumulation of wealth.3. The goods produced are distributed among people on the basis of peoples needs.4. The government coordinates the production decisions of the citizens.Which of the above statements are not correct?a)1 and 2 onlyb)1, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer? for UPSC 2024 is part of UPSC preparation. The Question and answers have been prepared according to the UPSC exam syllabus. Information about Consider the following statements regarding a purely capitalist economy:1. It is based on the policy of minimum governmental interference in the economic affairs of individuals.2. There is no restriction on the ownership of assets and accumulation of wealth.3. The goods produced are distributed among people on the basis of peoples needs.4. The government coordinates the production decisions of the citizens.Which of the above statements are not correct?a)1 and 2 onlyb)1, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for UPSC 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Consider the following statements regarding a purely capitalist economy:1. It is based on the policy of minimum governmental interference in the economic affairs of individuals.2. There is no restriction on the ownership of assets and accumulation of wealth.3. The goods produced are distributed among people on the basis of peoples needs.4. The government coordinates the production decisions of the citizens.Which of the above statements are not correct?a)1 and 2 onlyb)1, 3 and 4 onlyc)3 and 4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer?.
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