______ involves the predominance of bureaucracy and resulting inefficiencies and delays
Options
ASocialistic economy
BCapitalist economy
CMixed economy
DFree market economy
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Introduction to Business EconomicsPYQ Jun 22Question 682 of 209
All Questions Correct Answer
✅ Option a — Socialistic economy
All Options:
- ASocialistic economy
- BCapitalist economy
- CMixed economy
- DFree market economy
Detailed Solution & Explanation
• The question describes a scenario where bureaucracy is dominant, leading to inefficiencies and delays. This is a characteristic often associated with a particular type of economic system.
• Let's analyze the options:
• (A) Socialistic economy: In a socialistic economy, the government plays a central role in economic decision-making, owning and controlling most means of production. This extensive government involvement often leads to a large bureaucratic apparatus, which can indeed result in inefficiencies, red tape, and delays in decision-making and implementation. This aligns perfectly with the description.
• (B) Capitalist economy: A capitalist economy emphasizes private ownership, free markets, and minimal government intervention. While some bureaucracy exists in any large organization (including private ones), it is not the defining characteristic or a predominant cause of systemic inefficiency and delays in a capitalist system. The focus is on competition and efficiency.
• (C) Mixed economy: A mixed economy combines elements of both capitalism and socialism. While it can experience some bureaucratic issues due to government involvement, the term "predominance of bureaucracy" and "resulting inefficiencies and delays" points more strongly to a system where government control is much more extensive, as in a purely socialistic model.
• (D) Free market economy: This is essentially another term for a capitalist economy, emphasizing minimal government intervention and market forces. Therefore, it shares the same reasons for being incorrect as option (B).
• Therefore, the correct answer is (A) Socialistic economy, as its fundamental structure involves extensive state control and planning, which inherently fosters a large bureaucracy prone to inefficiencies and delays.
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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