Question : Assertion: A mixed economy combines elements of both market and command economies.
Reason: In a mixed economy, the government intervenes to correct market failures and ensure equitable distribution of resources.
Option 1: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Option 2: Both the assertion and reason are true, but the reason is not a correct explanation of the assertion.
Option 3: The assertion is true, but the reason is false.
Option 4: The assertion is false, but the reason is true.
Correct Answer: Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
Solution : The correct answer is (a) Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
The assertion is true. In a mixed economy, there is a combination of private enterprise and government intervention. The market mechanism plays a significant role in resource allocation, production, and pricing, while the government also intervenes to correct market failures and promote social welfare.
The reason provided is a correct explanation of the assertion. One of the primary roles of government in a mixed economy is to address market failures, such as externalities, monopolies, and information asymmetry. The government may regulate certain industries, provide public goods, implement social welfare programs, and establish policies to promote equitable distribution of resources.
Therefore, the correct answer is Both the assertion and reason are true, and the reason is a correct explanation of the assertion.
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