Which of the following pairs of an economic agent and an economic decision it takes is correctly matched?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Banks – what interest rate to charge on the credits
Economic agents are those who take economic decisions. Each kind of agent takes its own kind of decision.
Option (1) Banks – what interest rate to charge on the credits — Correct. Banks lend money, so they decide the interest rate on credit.
Option (2) Producers – how much to tax — Incorrect. Producers decide what and how much to produce. Taxing is a decision of the government.
Option (3) Consumers – what interest rate to charge on the credits — Incorrect. Consumers do not lend money. They decide what and how much to consume.
Option (4) Consumers – what and how much to produce — Incorrect. Deciding what to produce is the producer’s choice.
NCERT (2026-27): “Economic Agents By economic units or economic agents, we mean those individuals or institutions which take economic decisions. They can be consumers who decide what and how much to consume. They may be producers of goods and services who decide what and how much to produce. They may be entities like the government, corporation, banks which also take different economic decisions like how much to spend, what interest rate to charge on the credits, how much to tax, etc.” |