With reference to the functioning of the different kinds of economic systems, consider the following statements: Great Depression reinforced the belief in the self-correcting quality of the market. Market socialism had been suggested in the context of the capitalist economy. World Bank has given a fixed template of the mixed economic model for nations to follow. Mixed Economy has become the most accepted way to organize an economy. Which of the statements given above is/are correct?a)2 and 3 onlyb)2, 3 and 4 onlyc)4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer?

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With reference to the functioning of the different kinds of economic systems, consider the following statements:

Great Depression reinforced the belief in the self-correcting quality of the market.

Market socialism had been suggested in the context of the capitalist economy.

World Bank has given a fixed template of the mixed economic model for nations to follow.

Mixed Economy has become the most accepted way to organize an economy.

Which of the statements given above is/are correct?

a)
2 and 3 only
b)
2, 3 and 4 only
c)
4 only
d)
1, 2, 3 and 4

Correct answer is option 'C'. Can you explain this answer?

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With reference to the functioning of the different kinds of economic ...

Option c is correct.

Statement 1 is incorrect: Great Depression was a setback to the belief in the self-correcting quality of the market. In the aftermath of the GD, Keynes questioned the very principles of ‘laissez faire’ and the nature of the ‘invisible hand’. He even opined that the invisible hand brings equilibrium to the economy but by ‘strangulating the poor’. He suggested that prices and wages were not flexible enough to provide employment to all. This inflexibility is a basic reason why markets are not always self-correcting.
Statement 2 is incorrect: Market socialism had been suggested in the context of the socialist economy. It was Keynes who had suggested state intervention in the context of the capitalist economy.
Statement 3 is incorrect: World Bank has not given any such fixed template. World Development Report 1999 mentions that “Governments play a vital role in development, but there is no simple set of rules that tells them what to do”. World Bank went on to suggest that every country should determine the areas and the extent of the market and state intervention, depending on its own stage of economic development, socio-political and other historical factors.
Statement 4 is correct: The emergence of the mixed economy model was able to settle the long-standing debate as to what was the best way to organize an economy for all times to come. World Bank had rejected both the historically existing economic orders, namely the free-market economy, and the state economy. Rather, it advocates for a ‘mixture’ of both the economic orders, even if the exact nature of the mixture varies from nation to nation.

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With reference to the functioning of the different kinds of economic ...

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Explanation:

The correct answer is option 'C' which states that only statement 4 is correct. Let's break down each statement to understand why this is the correct answer:

Statement 1: Great Depression reinforced the belief in the self-correcting quality of the market.
- This statement is incorrect. The Great Depression of the 1930s actually highlighted the limitations of the self-regulating market and led to the understanding that government intervention is sometimes necessary to stabilize the economy.

Statement 2: Market socialism had been suggested in the context of the capitalist economy.
- This statement is incorrect. Market socialism is a system where there is a mix of public and private ownership in the economy, with the government playing a significant role in regulating and controlling certain sectors. It is not specifically related to the capitalist economy.

Statement 3: World Bank has given a fixed template of the mixed economic model for nations to follow.
- This statement is incorrect. The World Bank does not prescribe a fixed template for nations to follow in terms of their economic system. It provides advice and assistance based on the specific needs and circumstances of each country.

Statement 4: Mixed Economy has become the most accepted way to organize an economy.
- This statement is correct. In the modern world, a mixed economy, which combines elements of both capitalism and socialism, has become the most accepted way to organize an economy. This system allows for a balance between market forces and government intervention, providing a more stable and efficient economic environment.

Therefore, the correct answer is option 'C' as only statement 4 is correct.

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With reference to the functioning of the different kinds of economic systems, consider the following statements: Great Depression reinforced the belief in the self-correcting quality of the market. Market socialism had been suggested in the context of the capitalist economy. World Bank has given a fixed template of the mixed economic model for nations to follow. Mixed Economy has become the most accepted way to organize an economy. Which of the statements given above is/are correct?a)2 and 3 onlyb)2, 3 and 4 onlyc)4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer?

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With reference to the functioning of the different kinds of economic systems, consider the following statements: Great Depression reinforced the belief in the self-correcting quality of the market. Market socialism had been suggested in the context of the capitalist economy. World Bank has given a fixed template of the mixed economic model for nations to follow. Mixed Economy has become the most accepted way to organize an economy. Which of the statements given above is/are correct?a)2 and 3 onlyb)2, 3 and 4 onlyc)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 With reference to the functioning of the different kinds of economic systems, consider the following statements: Great Depression reinforced the belief in the self-correcting quality of the market. Market socialism had been suggested in the context of the capitalist economy. World Bank has given a fixed template of the mixed economic model for nations to follow. Mixed Economy has become the most accepted way to organize an economy. Which of the statements given above is/are correct?a)2 and 3 onlyb)2, 3 and 4 onlyc)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 With reference to the functioning of the different kinds of economic systems, consider the following statements: Great Depression reinforced the belief in the self-correcting quality of the market. Market socialism had been suggested in the context of the capitalist economy. World Bank has given a fixed template of the mixed economic model for nations to follow. Mixed Economy has become the most accepted way to organize an economy. Which of the statements given above is/are correct?a)2 and 3 onlyb)2, 3 and 4 onlyc)4 onlyd)1, 2, 3 and 4Correct answer is option 'C'. Can you explain this answer?.

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