A socialist economy is also known by which other names?
AA free economy or a laissez faire economy
BA mixed economy or an extended capitalist one
CA closed economy or a subsistence based economy
DA planned economy or a command economy
Answer & Solution
Correct answer: D. A planned economy or a command economy
1. Socialism is defined as a way of organising society in which major industries are owned and controlled by the government.
2. The textbook states that a socialist economy is also known as a planned economy or a command economy.
3. A free economy, or laissez faire, is the alternative name the book gives for a capitalist economy, so option A belongs to the opposite system.
4. Its features include public ownership of the means of production, central planning, maximum social benefit, absence of the price mechanism and a classless society.
5. Among its listed merits is the end of trade cycles, and among its demerits the absence of incentive for efficiency.
_Source: TN HSC Class 12 Economics (Samacheer Kalvi, Govt of Tamil Nadu), Ch 1 "Introduction to Macro Economics", §1.7.2_
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