Dear Readers,
1. In a mixed economy, how does government intervention typically affect competition?
a) It reduces competition by regulating prices and output.
b) It increases competition by providing subsidies to businesses.
c) It has no impact on competition.
d) It eliminates competition entirely.
e) None of these
Answer: a
2. What is a key reason for governments to regulate natural monopolies in a mixed economy?
a) To encourage monopolistic behavior and limit competition.
b) To ensure that these industries serve the public interest and prevent price abuses.
c) To provide government subsidies to monopolistic companies.
d) To eliminate natural monopolies and promote competition.
e) None of these
Answer: b
3. Which of the following statements is true about the role of the government in a mixed economy?
a) The government has no role in economic affairs.
b) The government is solely responsible for all economic activities.
c) The government plays a regulatory and supportive role in the economy.
d) The government controls all businesses in the economy.
e) None of these
Answer: c
4. What is the primary purpose of antitrust laws in a mixed economy?
a) To promote mergers and acquisitions among large corporations.
b) To encourage businesses to engage in unfair practices.
c) To prevent the abuse of market power and promote fair competition.
d) To ensure that small businesses have a competitive advantage.
e) None of these
Answer: c
5. In a mixed economy, what is a potential downside of excessive competition among businesses?
a) Higher prices for consumers.
b) Decreased product quality.
c) Economic stagnation.
d) Reduced innovation.
e) None of these
Answer: d
6. How does a mixed economy balance the interests of businesses and consumers in terms of competition?
a) By favoring businesses over consumers.
b) By promoting consumer interests over business interests.
c) By ensuring a fair balance between the two.
d) By ignoring both business and consumer concerns.
e) None of these
Answer: c
7. Which economic system allows for the highest degree of government control and ownership of resources and businesses?
a) Mixed economy
b) Capitalism
c) Socialism
d) Free market economy
e) None of these
Answer: c
8. How does the concept of "creative destruction" relate to competition in a mixed economy?
a) It means that competition always leads to destruction and is harmful.
b) It refers to the idea that competition can lead to the downfall of outdated businesses and the rise of innovative ones.
c) It suggests that government control is necessary to prevent any form of destruction.
d) It advocates for the preservation of traditional business practices.
e) None of these
Answer: b
9. Which entity is responsible for enforcing labor laws and regulations related to worker rights in a mixed economy?
a) The United Nations
b) The International Monetary Fund (IMF)
c) Labor unions
d) The Department of Labor or a similar government agency
e) None of these
Answer: d
10. In a mixed economy, what does the term "public goods" refer to?
a) Goods and services provided by private businesses.
b) Goods that are only available to government employees.
c) Goods and services that are provided by the government and benefit all citizens.
d) Goods and services that are not needed in a modern economy.
e) None of these
Answer: c
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MAHENDRA GURU