In the context of economic theory, the 'Invisible Hand' suggests that: MCQ with Answer and Explanation

In the context of economic theory, the 'Invisible Hand' suggests that:
A. Individuals pursuing self-interest can promote social welfare through market mechanism
B. Markets always fail
C. Collective ownership is optimal
D. Government planning is necessary for efficiency
Answer: Option A
Solution (By JKSSB Mock Tests)
Adam Smith's concept of the invisible hand argues that individuals seeking their own gain in competitive markets unintentionally promote the overall social good.

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Practice More Economy Set 1 Questions

Question #1
The 'demonetization' of high-value currency notes in 2016 included notes of which denominations?
A. Rs 100 and Rs 1,000
B. Rs 100 and Rs 500
C. Rs 1,000 and Rs 2,000
D. Rs 500 and Rs 1,000

Correct Answer: Option D


Explanation:
Demonetization in November 2016 invalidated old Rs 500 and Rs 1,000 notes.

This question belongs to: Economy GK Economy Set 1
Question #2
The 'Pradhan Mantri Annadata Aay Sanrakshan Abhiyan' is a scheme for:
A. ensuring remunerative prices to farmers
B. irrigation
C. fertilizer subsidy
D. crop insurance

Correct Answer: Option A


Explanation:
PM-AASHA aims to ensure remunerative prices to farmers through price support, price deficiency payment and private procurement.

This question belongs to: Economy GK Economy Set 1
Question #3
Which of the following is a characteristic of a command economy?
A. Decentralised decision making by private firms
B. Prices determined solely by market forces
C. Consumer sovereignty as the guiding principle
D. Central authority allocates resources according to a plan

Correct Answer: Option D


Explanation:
In a command (planned) economy, a central planning authority makes major decisions regarding production, allocation of resources and distribution of goods.

This question belongs to: Economy GK Economy Set 1