Socialist Economy: Features and Drawbacks

Q. Who owns and controls the means of production in a socialist economy?

1. Public sector
2. Private sector
3. Licenced private companies
4. Both public and private sectors

Q. How are decisions regarding economic problems addressed in a socialist economy?

1. Price mechanism
2. Centralised planning
3. Privatisation
4. Police states

Q. Which of the following terms is not related to a socialist economy?

1. Centralised planning
2. Social welfare
3. Price mechanism
4. Public sectors

Q. Consider yourself a citizen of a country that follows a socialist economic system. Which of the following statements are valid regarding your country?

1. People have a limited choice of products as customers.
2. The government is responsible for social welfare.
3. Private ownership is allowed.
4. There are no private entrepreneurs.

Q. Which of the following statements highlight(s) a few drawbacks of the socialist economy?

1. Less investment potential
2. Importance to social welfare
3. Limited choice of products
4. Economic equality for all

Q. List the adverse effect(s) of the absence of private ownership.

1. Absence of incentive to the private individuals
2. Entire burden falls on the government
3. Increase in social disparity
4. Limited choice of products