Which of the following is a negative feature of a Market Economy?

High income inequality

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Low income inequality

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Complete government control

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Price determined by government.

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is A High income inequality
Market economy is more of profit maximizing as it relies highly on the market forces. Because of this the gap between the poor and the rich increase as the profit earner gets richer. Hence it leads to higher income inequality in long term.

Suggest Corrections

Similar questions

Which of the following government factors are determined by the degree and extent of production, employment and income?

Q. In an economy, people always consume half of any additional income and save the other half. Determine the additional income generated if government makes an additional expenditure of Rs. 20,000 crores.
(Additional Income Generated = Rs.40,000 stores)

Consider an economy described by the following functions: C = 20 + 0.80Y, I = 30, G = 50, TR = 100 (a) Find the equilibrium level of income and the autonomous expenditure multiplier in the model. (b) If government expenditure increases by 30, what is the impact on equilibrium income? (c) If a lump-sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?

Q. Who gave the following statement?
"Economic Development is the process by which an economy is transformed from one whose rate of growth of per capita income is small or negative, to one in which a significant self-sustained rate of increase of per capita income is a permanent and long term feature".

Consider an economy described by the following function: C = 20 + 0.80Y, I = 30, G = 50, TR = 100.

(i) Find the equilibrium level of income and the autonomous expenditure multiplier in the model.

(ii) If government expenditure increases by 30, what is the impact on equilibrium income?

(iii) If a lump sum tax of 30 is added to pay for the increase in government purchases, how will equilibrium income change?

Join BYJU'S Learning Program

Which of the following is a negative feature of a Market Economy?

The correct option is A High income inequalityMarket economy is more of profit maximizing as it relies highly on the market forces. Because of this the gap between the poor and the rich increase as the profit earner gets richer. Hence it leads to higher income inequality in long term.

The correct option is A High income inequality
Market economy is more of profit maximizing as it relies highly on the market forces. Because of this the gap between the poor and the rich increase as the profit earner gets richer. Hence it leads to higher income inequality in long term.