A socialist economy is called as which of the following?
Options
ACommand economy
BMilitary economy
CBehavioralist economy
DApplied economy
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Introduction to Business EconomicsPYQ Jun 22Question 676 of 209
All Questions Correct Answer
✅ Option a — Command economy
All Options:
- ACommand economy
- BMilitary economy
- CBehavioralist economy
- DApplied economy
Detailed Solution & Explanation
• A socialist economy is characterized by significant government control over the means of production and resource allocation. Decisions about what to produce, how to produce, and for whom to produce are primarily made by a central authority or government.
• This centralized decision-making process, where the government "commands" or directs economic activity, is the defining feature of a command economy. Therefore, a socialist economy is often referred to as a command economy.
• In a command economy, the government plans and controls most economic activities, aiming to achieve social and economic equality rather than profit maximization. This aligns perfectly with the core principles of socialism.
• Option (A) Command economy is correct because it accurately describes the centralized planning and control inherent in a socialist economic system.
• Option (B) Military economy is incorrect. While some socialist countries might have strong military sectors, the term "military economy" refers to an economy heavily focused on military production and spending, which is not a defining characteristic of all socialist economies.
• Option (C) Behavioralist economy is incorrect. This term relates to the study of psychological factors influencing economic decision-making, which is a branch of economics, not a type of economic system.
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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