Introduction to Business EconomicsPYQ Jun 23Question 697 of 209
All Questions

Which of the following is one of the merits of socialism

Options

AImportance given to personal efficiency
BImportance give to productivity
CIncentive for economic decisions
DRapid growth and balanced economic development
For any discrepancies in this question, email contact@cadada.in

Correct Answer

✅ Option d — Rapid growth and balanced economic development

All Options:

  • AImportance given to personal efficiency
  • BImportance give to productivity
  • CIncentive for economic decisions
  • DRapid growth and balanced economic development

Detailed Solution & Explanation

• Socialism is an economic system where the means of production are largely owned and controlled by the state or community, rather than private individuals. Its primary goal is social welfare and equality. • The correct answer is (D) Rapid growth and balanced economic development. In a socialist economy, the government plans and directs economic activities. This central planning aims to allocate resources efficiently across different sectors and regions, preventing overproduction in some areas and underproduction in others. The focus is on meeting societal needs and ensuring equitable distribution, which can lead to more balanced development across the economy and potentially faster growth in sectors deemed essential for public welfare. • Option (A) Importance given to personal efficiency and (B) Importance given to productivity are generally less emphasized in pure socialist systems compared to capitalist ones. While productivity is desired, the primary driver isn't individual profit or competition, but rather collective goals. Personal efficiency might not be rewarded as directly as in a market economy, as incentives are often collective rather than individual. • Option (C) Incentive for economic decisions is also typically weaker in socialism. Economic decisions are made by central planners, not driven by individual profit motives or consumer demand as much as in capitalism. This can sometimes lead to a lack of innovation or responsiveness to changing consumer preferences.

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 Syllabus

Exam 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.

Related Comparison Tables

Microeconomics vs Macroeconomics: The Complete CA Foundation GuidePositive vs Normative Economics: Fact vs Opinion

More Questions from Introduction to Business Economics

A study of how increases in the corporate income tax rate will affect the nation unemployment rate is an example of

In a ______ the producer is free to set up any type of firms produce goods and services of his choice.

In the beginning the word economics was

In Economics, we use the term scarcity to mean;

In a free market economy, allocation of resources is determined by

If there is no central planning authority to make the fundamental economic decisions and thus to allocate productive resources, how can then free enterprise or capitalist economy solve its central problems?

Ready to Master Introduction to Business Economics?

Practice all 209 questions with instant feedback, earn XP, track your streaks, and ace your CA Foundation exam.

Start Practicing — It's Free