Which of the following is a feature of a planned economy? MCQ with Answer and Explanation

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Which of the following is a feature of a planned economy?

A. Centralised planning of resource allocation

B. Price determination solely by market forces

C. Private ownership of all resources

D. Decentralised decision making

Answer: Option A

Solution (By JKSSB Mock Tests)

In a planned (command) economy, the central authority plans and allocates resources according to predetermined objectives rather than market signals.

This question belongs to: Economy GK Economy Set 1

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Question #1

The concept of 'Moral Hazard' in the context of deposit insurance arises because:

A. Banks may take excessive risks knowing that deposits are insured

B. Depositors become more careful about bank risk

C. Insurance always reduces risk-taking

D. Depositors monitor banks more intensively

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Correct Answer: Option A

Explanation:
Deposit insurance can create moral hazard by reducing depositors’ incentive to monitor banks and by encouraging banks to take greater risks because the downside is partly borne by the insurer.

This question belongs to: Economy GK Economy Set 1

Question #2

The 'Pradhan Mantri Jan Dhan Yojana' accounts were opened primarily to:

A. promote stock trading

B. promote savings and financial inclusion

C. provide loans to large companies

D. collect taxes

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Correct Answer: Option B

Explanation:
PMJDY aims at financial inclusion through zero-balance savings accounts.

This question belongs to: Economy GK Economy Set 1

Question #3

In the context of monetary policy implementation, the 'Corridor System' refers to:

A. The absence of any standing facilities

B. Only the range of inflation targets

C. The arrangement in which the policy rate is kept within a standing-facility corridor defined by the lending and deposit rates of the central bank

D. Only the range of fiscal targets

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Correct Answer: Option C

Explanation:
In a corridor system the central bank’s overnight lending rate and deposit rate form a corridor within which the interbank rate fluctuates; open-market operations keep the market rate near the centre of the corridor.

This question belongs to: Economy GK Economy Set 1

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