Consider the following pairs:1. Market Economy - Laissez-faire policy2. Non-Market Economy - Emphasis on wealth exchange3. Socialist Model - State control of natural resources4. Communist Model - State control of labor and resourcesHow many pairs given above are correctly matched?a)Only one pairb)Only two pairsc)Only three pairsd)All four pairsCorrect answer is option 'C'. Can you explain this answer?

Question

Answer

1. Market Economy - Laissez-faire policy: Correct. A market economy operates on the principles of laissez-faire, emphasizing minimal government intervention and relying on market forces to regulate economic activities.

2. Non-Market Economy - Emphasis on wealth exchange: Incorrect. A non-market economy, such as socialism or communism, does not emphasize wealth exchange. Instead, it focuses on state control of resources and production, aiming for the well-being of all citizens and preventing economic inequality through state ownership and planning.

3. Socialist Model - State control of natural resources: Correct. In a socialist model, the state controls natural resources, which are utilized for the benefit of society as a whole.

4. Communist Model - State control of labor and resources: Correct. In a communist model, the state controls both labor and resources, ensuring that production and distribution are managed centrally by the state to achieve a classless society.

Thus, three pairs are correctly matched: 1, 3, and 4.

Answer

Pair Explanation:
1. Market Economy - Laissez-faire policy
- In a market economy, decisions regarding investment, production, and distribution are based on market forces such as supply and demand. Laissez-faire policy refers to minimal government intervention in economic affairs, allowing the market to operate freely without restrictions.
2. Non-Market Economy - Emphasis on wealth exchange
- A non-market economy is characterized by the absence of a free market system, with the government playing a dominant role in economic activities. In such economies, there is often an emphasis on wealth redistribution rather than wealth exchange through market mechanisms.
3. Socialist Model - State control of natural resources
- The socialist model advocates for collective ownership of the means of production and distribution, including natural resources. In this system, the state controls and manages key resources to ensure equitable distribution and social welfare.
4. Communist Model - State control of labor and resources
- In a communist model, all resources and means of production are owned and controlled by the state on behalf of the people. This includes not only natural resources but also labor, with the government determining production levels and distribution of goods and services.

Correctness:
- Three pairs out of the four given are correctly matched based on the descriptions provided above. The only mismatch is in the second pair, where the emphasis on wealth exchange is more characteristic of a market economy rather than a non-market economy.

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