Class 12 Macro Economics - Chapter Introduction to Macro Economics NCERT Solutions | What are the important features of a cap
What are the important features of a capitalist economy?
Capitalist economy is an economic system where the means of production are privately owned. These means of production are driven by the motive of profit making. This economic structure is also known as free market economy of laissez faire.
1. Role of the government
The government provides the basic framework for the smooth functioning of an economy. It provides the basic framework and is responsible for maintenance of law and order, justice, growth and stability, defence, etc.
2. Profit motive
The economic agents are driven by the prime motive of profit maximization.
3. Central problems
The central problems of an economy are solved by the market forces of demand and supply, i.e., the law of demand and supply operates here. The producers will supply only those goods and services that are demanded by the economy.
4. Role of private sector
The role of private individuals is more dominant. The main role of undertaking production and organising factors of production are played by the private individuals and capitalists.
5. Laissez-faire
This economy is called laissez faire. It has minimum interference or restriction from the government.
More Questions From Class 12 Macro Economics - Chapter Introduction to Macro Economics
Popular Questions of Class 12 Macro Economics
- Q:-
What is marginal propensity to consume? How is it related to marginal propensity to save?
- Q:-
Explain why public goods must be provided by the government.
- Q:-
Differentiate between balance of trade and current account balance.
- Q:-
What are the four factors of production and what are the remunerations to each of these called?
- Q:-
What is a barter system? What are its drawbacks?
- Q:-
What is the difference between ex ante investment and ex post investment?
- Q:-
Distinguish between revenue expenditure and capital expenditure.
- Q:-
What are official reserve transactions? Explain their importance in the balance of payments.
- Q:-
Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.
- Q:-
What are the main functions of money? How does money overcome the shortcomings of a barter system?
Recently Viewed Questions of Class 12 Macro Economics
- Q:-
What is a barter system? What are its drawbacks?
- Q:-
Are the concepts of demand for domestic goods and domestic demand for goods the same?
- Q:-
Suppose C = 40 + 0.8Y D, T = 50, I = 60, G = 40, X = 90, M = 50 + 0.05Y
(a) Find equilibrium income. (b) Find the net export balance at equilibrium income (c) What happens to equilibrium income and the net export balance when the government purchases increase from 40 and 50?
- Q:-
Should a current account deficit be a cause for alarm? Explain.
- Q:-
Why should the aggregate final expenditure of an economy be equal to the aggregate factor payments? Explain.
- Q:-
Are fiscal deficits inflationary?
- Q:-
What are official reserve transactions? Explain their importance in the balance of payments.
- Q:-
Why is the open economy autonomous expenditure multiplier smaller than the closed economy one?
- Q:-
Would the central bank need to intervene in a managed floating system? Explain why.
- Q:-
Distinguish between the nominal exchange rate and the real exchange rate. If you were to decide whether to buy domestic goods or foreign goods, which rate would be more relevant? Explain.
- All Chapters Of Class 12 Macro Economics
- All Subjects Of Class 12