CA Foundation Exam > CA Foundation Questions > Price-mechanism is an important feature of &n...
Start Learning for Free
Price-mechanism is an important feature of –
(i) Market economy
(ii) Regulated economy
(iii) Mixed economy
(iv) Capitalist economy
(i) Market economy
(ii) Regulated economy
(iii) Mixed economy
(iv) Capitalist economy
- a)i and ii only
- b)iii and iv only
- c)i and iii only
- d)i and iv only
Correct answer is option 'D'. Can you explain this answer?
Most Upvoted Answer
Price-mechanism is an important feature of –(i) Market economy(i...
Understanding the Price Mechanism
The price mechanism is a fundamental concept in economics, particularly in how markets operate. It plays a crucial role in determining how resources are allocated in different economic systems.
1. Market Economy
- In a market economy, decisions regarding production, investment, and distribution are driven by supply and demand.
- Prices fluctuate based on consumer preferences and resource availability, enabling efficient allocation of resources.
2. Capitalist Economy
- A capitalist economy emphasizes private ownership and free markets.
- The price mechanism helps in signaling what goods and services are in demand and guides producers on what to create.
3. Regulated Economy
- In a regulated economy, government intervention often dictates prices and production levels.
- The price mechanism is less effective here, as prices may not reflect true supply and demand.
4. Mixed Economy
- A mixed economy combines elements of both market and regulated economies.
- While the price mechanism operates, it is often influenced by government regulations, which can distort prices.
Conclusion
The price mechanism is a core feature of both market and capitalist economies. It effectively coordinates economic activity through price signals driven by unrestricted supply and demand.
- Therefore, the correct answer to the question is option 'D' (i and iv only), as these systems utilize the price mechanism most effectively, whereas regulated and mixed economies may not rely on it as strongly.
The price mechanism is a fundamental concept in economics, particularly in how markets operate. It plays a crucial role in determining how resources are allocated in different economic systems.
1. Market Economy
- In a market economy, decisions regarding production, investment, and distribution are driven by supply and demand.
- Prices fluctuate based on consumer preferences and resource availability, enabling efficient allocation of resources.
2. Capitalist Economy
- A capitalist economy emphasizes private ownership and free markets.
- The price mechanism helps in signaling what goods and services are in demand and guides producers on what to create.
3. Regulated Economy
- In a regulated economy, government intervention often dictates prices and production levels.
- The price mechanism is less effective here, as prices may not reflect true supply and demand.
4. Mixed Economy
- A mixed economy combines elements of both market and regulated economies.
- While the price mechanism operates, it is often influenced by government regulations, which can distort prices.
Conclusion
The price mechanism is a core feature of both market and capitalist economies. It effectively coordinates economic activity through price signals driven by unrestricted supply and demand.
- Therefore, the correct answer to the question is option 'D' (i and iv only), as these systems utilize the price mechanism most effectively, whereas regulated and mixed economies may not rely on it as strongly.
Free Test
FREE
| Start Free Test |
Community Answer
Price-mechanism is an important feature of –(i) Market economy(i...
- Price-mechanism is an important feature of the market economy and capitalist economy.
- In a market economy, prices are determined by the free interaction of the forces of demand and supply without government intervention.
- Similarly, in a capitalist economy, the price mechanism plays a crucial role in resource allocation as it allows for the efficient distribution of goods and services based on consumer preferences and available resources.
|
Explore Courses for CA Foundation exam
|
|
Top Courses for CA FoundationView all
Question Description
Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer?.
Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer?.
Solutions for Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Price-mechanism is an important feature of –(i) Market economy(ii) Regulated economy(iii) Mixed economy(iv) Capitalist economya)i and ii onlyb)iii and iv onlyc)i and iii onlyd)i and iv onlyCorrect answer is option 'D'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup