Given below are 2 sets of statements in column I and column II. Match the statements in different columns(column 1 and 2 ) to make a correct pair.
| i. | Institution | a. | arrangement allowing commodity trade |
| ii. | How much to produce? | b. | organization of economic activities in country |
| iii. | Market | c. | organization with some purpose |
| iv. | Centrally planned economy | d. | central problem of economy |
Answer & explanation
Correct answer: option 2
The correct answer is Option 2: ☀ i-c, ii-d, iii-a, iv-b
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i. Institution (c. organization with some purpose): An institution is a structured organization established for a specific purpose, like a school or a bank.
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ii. How much to produce? (d. central problem of economy): This is a fundamental economic problem. Since resources are scarce, deciding how much of each good or service to produce is a crucial challenge for any economy.
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iii. Market (a. arrangement allowing commodity trade): A market is a venue where buyers and sellers can come together to exchange goods and services. It facilitates trade but isn't a formal organization itself.
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iv. Centrally planned economy (b. organization of economic activities in country): There are three ways to organize economic activity in any country or there are three types of economies: centrally planned economy, market economy and mixed economy. A centrally planned economy is a system where the government makes key decisions about production, resource allocation, and pricing. It essentially organizes the economic activities within a country.