In this article, we will share MP Board Class 10th Social Science Book Solutions Chapter 20 Economic System Pdf, These solutions are solved subject experts from the latest edition books.

MP Board Class 10th Social Science Solutions Chapter 20 Economic System

MP Board Class 10th Social Science Chapter 20 Text book Exercises

Objective Type Questions

Question 1.
Multiple Choice Questions
(Choose the correct answer from the following)

Question (i)
In capitalist economy the factors are owned by –
(a) Government
(b) private individuals
(c) Both of them
(d) None of them.
Answer:
(b) private individuals

Question (ii)
In capitalism the economic forces are operated by –
(a) Democracy
(b) Price mechanism
(c) Monarchy
(d) All of the above.
Answer:
(c) Monarchy

Question (iii)
In socialism consumer’s sovereignty –
(a) Increases
(b) Remains stable
(c) Is not affected
(d) Ends.
Answer:
(a) Increases

Question (iv)
Lack of individual freedom is found in –
(a) capitalism
(b) mixed economy
(c) socialism
(d) all of above.
Answer:
(c) socialism

Question (v)
Which system is adopted in the Indian economy –
(a) Capitalist economy
(b) Socialist system
(c) Mixed economy
(d) None of above.
Answer:
(c) mixed economy

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Question 2.
Fill in the blanks:

  1. In capitalism the means of production are owned by ……………….
  2. …………….. is considered the father of socialism.
  3. The joint sector is operated by the both government and …………….. together
  4. In socialism the factors of production are owned by ………………..
  5. …………….. is adopted in India.

Answer:

  1. private individual
  2. Karl Marx
  3. public sector
  4. government or society
  5. Mixed econbmy.

Question 3.
Match the coloumn:
MP Board Class 10th Social Science Solutions Chapter 20 Economic System img 1

Answer:

1. (c)
2. (a)
3. (b)

MP Board Class 10th Social Science Chapter 20 Very Short Answer Type Questions

Question 1.
By which mechanism the economic system is operated in capitalism?
Answer:
The Capitalist economy is operated by Price mechanism.

Question 2.
Who owns the factors of production in socialism?
Answer:
Society.

Question 3.
Mixed economy is a mixture of which two systems?
Answer:
Capitalistic and Socialistic.

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Question 4.
Which system is adopted in India?
Answer:
Mixed economic system.

Question 5.
Who owns the factors of production in mixed economy?
Answer:
Public and private sector.

MP Board Class 10th Social Science Chapter 20 Short Answer Type Questions

Question 1.
What is capitalism and socialism? Write.
Answer:
Capitalism:
The economic system of society which had been emerging in Europe from the 15th century is called capitalism. Under this system, the instruments and the means by which goods are produced are owned by private individuals and the production is carried out for making profit.

Socialism:
An economic system in which the government owns the means of production.

Question 2.
State the characteristics of capitalism?
Answer:
The following characteristics of capitalism are:

  1. Factors of production are owned by the individuals.
  2. Economic activities are carried out with the sole motive of project.
  3. Producers are to choose occupation of their own choice.
  4. Consumers are free to commodities of their choice.
  5. Economic decisions are taken on the basis of price.

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Question 3.
What do you mean by mixed economy? State the merits of mixed economy.
Answer:
Mixed economy is such an economic system in which public and private both the sectors work together. The role of both the sectors in the economy is determined in such a way that the welfare of all the classes of the society increases significantly.

The two merits are as such:
1. Reduction in economic inequalities:
In this system to reduce economic inequalities the government receives income by imposing tax on rich and spend the obtained income to make facilities available for poor people. Due to this the inequalities in the distribution of wealth remains under control in the society.

2. Industrial peace and social security:
In mixed economy several laws are made keeping in mind the interests of the labourers. Minimum wages, working conditions, and working hours are decided by the government.

MP Board Class 10th Social Science Chapter 20 Long Answer Type Questions

Question 1.
Give the meaning of economic system? Write its characteristics.
Or
What is the meaning of economic system? Write its characteristics. (MP Board 2009)
Answer:
The system which operates the economic activities of a country is called economic system. All the decisions related to the economy are taken by this system as determined by the society. Such as what commodities are to be produced, how to be produced, for whom to be produced etc. On the basis of these decisions only, consumption, production, exchange and distribution are determined in the economy. The day – to – day life of the people of the country depends upon these decisions defined as below

Prof. A. J. Brown – ‘Economic system is a medium by which people get their living’.

Prof. M Gotalic – ‘Economic system is a study of those ways of complicated human relationship by which the limited means are used to satisfy several private and public needs.’

Thus, economic system is meant by that institutional structure under which human life is conducted. This is an expanded concept and its form changes with the time and situations.

Following are the main characteristics of an economic system:

  1. The chief objective of an economic system is to solve the economic problems.
  2. The main problems of an economy are what should be produced, for whom should be produced and how should be produced.
  3. The means to satisfy human wants in the economy are available in limited quantity.
  4. To satisfy the human needs the methods of utilise of factors are selected by the economic system.
  5. Economic system is a group of institution.
  6. The economic system is related to a country or group of countries.
  7. The economic system is always changing in nature.

Question 2.
State the meaning of capitalism and write its features?
Or
Explain any five features of socialism? (MP Board 2009)
Answer:
An economy where in individuals are free to earn, own and control their earnings without government interference is called capitalistic economy.

Characteristics of Capitalist Economy:
1. Private ownership on means of production:
The chief characteristic of capitalist economic system is the ownership of private people on the means of production. Thus in capitalist economy individuals have the right to earn money and to spend it according to their desire.

2. Economic freedom:
In capitalist economy there is freedom to choose any occupation and to run it. Consumers have also freedom to choose goods according to their interest and habit.

3. Profit motive:
Profit motive holds highest place in this system. Therefore profit is called the heart of the capitalist system. All the activities in this system are operated to earn profit. The main aim of entrepreneurs is to maximise their profit.

4. Based on exploitation:
There are two classes in capitalist system such as capitalists class and labour class. The capitalist class pays very little wages to maximise their profit. Therefore it is said that the capitalist economic system is based on exploitation.

5. Price mechanism: The price of the commodity is determined by the free inferaction of the forces of demand and supply. The government does not interfere in the determination of price.

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Question 3.
What is mixed economy? Write its charecteristics. (MP Board 2009, 2011)
Answer:
Mixed economy is a system in which public and private both the sectors works together. The role of both the sectors is the economy is determined in such a way that the welfare of all the classes of the society increases significantly.

Main features of mixed economy:
1. Co – existence of public and private sectors:
The significant feature of mixed economy is the co – existence of public and private sectors. The functions are clearly divided between these two sectors.

2. Democratic system:
In the mixed economy all the decision such as division of economic activities between private and public sectors, determination of policies aims and objectives, distribution of resources etc., are taken by the public representatives. Thus mixed economy is conducted by democratic method and the tendencies of monopoly and dictatorship are not found in it.

3. Economic planning:
Economic planning is adopted for the economic development. Under this, the government decides physical and financial aims for the public sector and private sector. Both the sectors function to fulfil their fixed aims.

4. Control over price mechanism:
In mixed economy public welfare the government controls the direction of price mechanism through its price policy. In this system price mechanism acts in a limit.

5. Profit motive:
The role of private sector is very important in a mixed economy. The private sector operates its economic activities with the objective of earning profit. The means of production are also allotted on the basis of profit.

Question 4.
Explain the merits and demerits of capitalism?
Or
Write demerits of capatalism. (MP Board 2009, 2011)
Answer:
Merits of capitalism:
Following are the merits found in capitalist system.

1. Automatic system:
In this system there does not exist any government intervention. All the economic activities are governed on the basis of ‘Price Mechanism’ or market forces. Therefore this system is called automatic system.

2. Increase in production and income:
A rapid progress has been registered in the western countries through capitalist system. These countries have developed rapidly in the greed of profit motive and private property. In this system the desire to complete improves the standard of techniques of production. As a result in the capitalist system the production and income both increase rapidly.

3. Changing nature:
The capitalism has a merit of functioning according to the situation. The government has to change its policies and programmes according to the situations. The industrial policy, agricultural policy, trade policy, labour policy are always changing according to the situations but the capitalist system is operated by its fundamental feature as to earn profit.

4. Individual freedom:
In this system an individual can choose any occupation desired by him. Consumers also can choose the goods according to their liking. There exists full freedom to earn and spend the income. In brief under capitalism there is complete freedom regarding economic activities.

Demerits of capitalist economy:
1. Disparity in income and wealth:
The greatest demerit of the capitalist economy is the centralization of wealth in the hands of few people of the country whereas maximum people spend their lives in poverty and unemployment. This increases disparity in income and wealth.

2. Birth of class conflict:
In this system of capitalism clashes occur between the capitalist class and labour class. Thereby strikes, lock – out and distinctions are seen in the economy. Thus, class conflicts germinates in the society.

3. Economic instability:
The capitalist economy system is operated by price mechanism. There exists no central authority to control the economy. As a result the situation of inflation and depression is created in the economy. Thus, unstability occurs and trade cycles become active in the economy.

4. Unemployment:
The capitalist class uses machines to increase his profit. Due to this the demand for labour falls and unemployment increases. In the state of depression or deflation the problem of unemployment becomes tremendous.

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Question 5.
What is a socialistic economic system? Explain its characteristic.
Answer:
Prof. Dicknson has written, “socialism is such an economic system of the society in which the material means of production are owned by the society and which is operated by the representatives of whole the society and the institutions responsible to the community according to a general plan. All members of the community being entitled to benifit from the results of such socialised planned production on the basis of equal right.”

Characteristics of socialism:
Following are the main characteristics of socialism:

1. Collective ownership of means of production:
In a socialistic economic system the factors of production are used for the social welfare. In this system the individual profit motive is zero. As in this system the factors of production are owned by the government or the society, therefore in this system there is no possibility of exploitation and the social welfare increases.

2. Economic planning:
The socialist system is a planned system. Central planning has an important place in it. All the decisions regarding production are taken by the Central Planning authority. This results in rapid development.

3. Economic equality:
In this system all the factors of production are controlled by the state and the factors are used in the interest of the society. In this system individual profit has no space. As a result economic equality is found in the society.

4. End of exploitation:
In the socialist economic system production and distribution are owned and controlled by the government, therefore question of exploitation does not arise. The labourers are paid properly for their labour. The labourers own have partnership in the production, and sufficient shares from the profit are given to them. So in this system exploitation comes to an end.

MP Board Class 10th Social Science Chapter 20 Additional Important Questions

Objective Type Questions

Question 1.
Multiple Choice Questions
(Choose the correct answer from the following)

Question (i)
End of monopoly is possible only in –
(a) Capitalism
(b) Socialism
(c) Mixed economy
(d) Dictatorship.
Answer:
(b) Socialism

Question (ii)
Individual freedom does not exist in –
(a) Capitalism
(b) Socialism
(c) Democracy
(d) Oligocrucy.
Answer:
(b) Socialism

Question (iii)
Social Security is the reality of –
(a) Socialist
(b) Capitalists
(c) Mixed economists
(d) Diarchy.
Answer:
(c) Mixed economists

Question (iv)
Fear of nationalisation is the demerit of –
(a) Mixed economy
(b) Socialist economy
(c) Capitalist economy
(d) Democratic economy.
Answer:
(a) Mixed economy

Question 2.
Fill in the blanks:

  1. People who have capacity to purchase the goods is called the system of ……………..
  2. Market economy is the synonyms of ……………..
  3. Indian economy is based on the system of ………………

Answer:

  1. Capitalism
  2. Capitalistic economy
  3. Mixed economy

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Question 3.
True and False type questions:

  1. Social paraulism is the reality of capitalism.
  2. Labour is needed for living in socialism.
  3. Human welfare is neglected in socialistic economy.
  4. Das Capital is the book of Lenin.

Answer:

  1. True
  2. True
  3. False
  4. False.

Question 4.
Match the following:
MP Board Class 10th Social Science Solutions Chapter 20 Economic System img 2
Answer:

1. (d)
2. (a)
3. (b)
4. (c).

Answer in One – Two Words or One Sentence:

Question 1.
What are the challenges of mixed economy?
Answer:
Poverty unemployment and inflation.

Question 2.
What is capital?
Answer:
Capital is that part of money which a capitalist or an industrialist invests for setting up some industry/factory (or mill) for producing different goods or articles.

Question 3.
What is mixed economy?
Answer:
An economy, wherein both public and private sectors coexit is known as mixed economy.

Question 4.
What is capitalistic economy?
Answer:
An economy, wherein individuals are free to earn, own and control their earnings without government interference is known as capitalistic economy.

Question 5.
What is socialistic economy?
Answer:
An economy which is owned, managed and controlled by the government is known as socialistic economy.

Question 6.
What is the capitalist economy called?
Answer:
Capitalist economy is also known as free market economy.

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Question 7.
What is the other name of socialist economy?
Answer:
Centrally planned economy.

Question 8.
Mention three examples of capitalist economy?
Answer:
United States of America, United Kingdom and Japan.

Question 9.
What is meant by the policy of protection?
Answer:
It means giving some Special protection to the newborn industries just to save them from the stiff competition.

Question 10.
What do you mean by the term ‘individualism’?
Answer:
It means that individual is supreme and the state and society exist only for his welfare. Minimum restriction should be put in his ways. Only in a free atmosphere he can show his best.

MP Board Class 10th Social Science Chapter 20 Very Short Answer Type Questions

Question 1.
What is the meaning of “Laissez Faire”?
Answer:
Laissez Faire is a theory of economics which favours a policy of non-interference in the sphere of industry and business. Adam Smith outlined this theory in 1776. He supported the idea that the Government should neither impose any taxes on imports nor pass any law to regulate the trade and commerce within the country.

Question 2.
Mention the types of economy based upon ownership?
Answer:

  1. Capitalistic economy.
  2. Socialistic economy.
  3. Mixed economy.

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Question 3.
What is the basic difference of the capitalism, socialism and mixed economic system?
Answer:
Three types of economic systems are mainly found in the world such as capitalism, socialism and mixed economy. The basic difference between these three systems is who is the owner of the factors of production and how these factors are used.

MP Board Class 10th Social Science Chapter 20 Short Answer Type Questions

Question 1.
What is capital economic system?
Answer:
In several countries of the world as America, England, France, Italy, Japan, Australia the capitalist economy exists. Capitalist economy is known by several names, as market economy, laissez fair or open economy, unplanned economy etc. Capitalism has been defined in many ways. According to Prof. Loucks and Hoots, ‘Capitalism is a system of economic organisation featured by the private ownership and the use for private profit of man made and nature made capital.’

Question 2.
State briefly the main features of socialist economy?
Answer:
Features of socialist economy:

  1. Government is the sole producer of goods and services.
  2. All properties belong to the government.
  3. Economic decision are taken by the central planning authority.
  4. Prices of good and services are determined by the government.

Question 3.
What are the merits and demerits of socialism?
Answer:
Merits of Socialism:

  1. Elimination of class struggle.
  2. Better allocation of resources.
  3. Reduction in inequalities of income.
  4. Economic stability.

Demerits of Socialism:

  1. Loss of efficiency and productivity.
  2. Burden of administration.
  3. Loss of consumer’s preferences.
  4. Loss of incentives.

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Question 4.
What are the merits and demertis of mixed economy?
Answer:
Merits of Mixed Economy:

  1. Social welfare and economic equalities.
  2. Efficient use of resources and rapid economic development.
  3. Private property.
  4. Freedom.

Demerits of Mixed Economy:

  1. Instability.
  2. Economic fluctuations.
  3. Inefficient operations.

MP Board Class 10th Social Science Chapter 20 Long Answer Type Questions

Question 1.
Describe the merits and demerits of socialism in detail?
Answer:
Merits of socialist economic system:
Following are the main merits of a socialist economy system.

1. Optimum utilization of resource:
Due to the central planning in socialist system the optimum use of the factors of production becomes possible. The resources, by planning are shifted from the areas of less productivity to the areas having more productivity. Along with this the economic activities of the different sectors of the economy are coordinated. It makes the utilization of factors optimum.

2. Economic stability:
Due to central planning in socialist system between the areas of consumption and production both mutual coordination is found. Therefore the situation of excessive production or less production does not exist. As a result of this economic stability is maintained in the economy.

3. Economic equality:
In the socialistic system there is no place for private property, laws of inheritance and tendency of earning profit. Property and factors are owned by the state. The job is given to people with their ability and efficiency. So economic equality is found in it.

4. End of class conflict:
Due to the ownership of the government on the factors of production in socialism, division of society on the basis of property and wealth is not found. In it, there exists only one class i.e. labour class. Therefore there is no possibility of class conflict.

Demerits of socialism:
Following are the main demerits of socialism:

1. End of consumer’s sovereignty:
In socialist system a consumer cannot consume things of his choice. Under this system a consumer has to consume only those goods and only in that quantity, which the state provides them. Therefore, consumer’s sovereignty ends in the society.

2. Centralization of power:
In the socialist economic system powers are centralised because all the economic activities are conducted by the government. The orders of the government are implimented at all levels. Therefore in this system the power is centralized completely in the hands of government, and there is no space left for individual freedom.

3. Lack of motivation for production work:
In socialism all the production work is controlled by the government and individual freedom has no place in it. In such a situation the labours are not motivated to do more work. It does not motivate for new inventions, research work and techniques of production.

4. Lack of individual freedom:
In socialist economy all the important functions such as quantity of production, basis of distribution, prices of the commodities, etc. are done by the government. In this system there is no place for desire of an individual.

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Question 2.
Discuss the merits and demerits of mixed economy in detail?
Answer:
Merits of mixed economy:
Following are the main merits of mixed economy:

1. Rapid economic growth:
In this system private and public both the sectors work together and try to increase the growth rate of the economy. The resources are allocated in optimum proportion to the various sections of economy by adopting economic planning. In this way the rate of economic development is increased by the optimum utilization of the resources.

2. Check on centralization and monopoly:
In a mixed economy private and public both the sectors are under the complete control of the government. The government controls the activities of’private sector, keeping in the mind the social interest of the society. Along with this efforts are made to terminate monopoly by nationalizing the areas necessary for public welfare.

3. Presence of freedom and motivation:
In the mixed economy the producers and individuals’ get motivated for work due to the rights of personal profit and ownership. In this system consumers have enough freedom to earn their income and to spend it.

4. Increase in Social Welfare:
In this system total economy is controlled and directed, by the government keeping in the mind the objective of social welfare. The government itself operates welfare policies.

Demerits of mixed economy:
Following are the main demerits of mixed economy.

1. Inefficiency:
In mixed  economy the demerits of capitalism and socialism both exist. In this system neither planning mechanism can work properly nor market mechanism can be activated. This spreads inefficiency in the economy.

2. No encouragement to private sector:
In this system government gives more importance to public sector. As a result the private sector is neglected. Government policies and officers also are not in favour of private sector. Therefore the private sector do not develop properly.

3. Inflow of foreign capital:
The government invites foreign capital for the expansion of public sector. This increases the influence of foreign powers. Foreign powers influence the political system of the country also.

4. Lack of practicability:
In mixed economy private and public sectors both work together. Thereby the policies, which are beneficial to one sector, may be harmful to the other sector. Due to lack of co – ordination private and public sectors compete with each other. As a result this affect the economy inversely.

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