Given below are two statements:
Statement I: The point about compatibility between what people in a society want and what they produce does not hold for a whole country or the entire world.
Statement II: The simple economy used to explain this compatibility assumes that everything produced in the society is consumed by its own people, with nothing got from outside.
In the light of the above statements, choose the correct answer from the options given below:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Statement I is false but Statement II is true.
Statement I: The point about compatibility between what people in a society want and what they produce does not hold for a whole country or the entire world. — False. What a society produces must match what its people collectively want. This general point holds for any country and even for the entire world.
Statement II: The simple economy used to explain this compatibility assumes that everything produced in the society is consumed by its own people, with nothing got from outside. — True. This assumption keeps the example simple. In reality, a society can also get goods from outside.
NCERT (2026-27): “1.1 A Simple Economy … Needless to say that there has to be some compatibility between what people in society collectively want to have and what they produce …” “Here we assume that all the goods and services produced in a society are consumed by the people in the society and that there is no scope of getting anything from outside the society. In reality, this is not true. However, the general point that is being made here about the compatibility of production and consumption of goods and services holds for any country or even for the entire world.” |