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3 The basic force that drives the capitalist economy is:
a) profit – motive;
b) technology;
c) government;
d) planning.

4 In a socialist economy, all decisions regarding production and distribution are
taken by:
a) central planning authority;
b) market forces;
c) customs and traditions;
d) private sector.

5 Redtapism and corruption lead to:
a) inefficiency of production;
b) inequality of income and wealth;
c) absence of technology;
d) efficient use of resources.

Answer the following questions.
1 What is traditional economy?
2 What are the salient features of capitalism?
3 What are the disadvantages of capitalism?
4 What is the basic force that drives a capitalist economy?
5 What are the basic features of socialism?
6 What are the merits of socialist economy?
7 What are the main advantages and disadvantages of a mixed economy?

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