MCQ Bank

John Maynard Keynes is widely recognized as the most influential critic of classical economics founded by Adam Smith. He argued that unfettered free markets do not automatically self-correct and require government intervention during demand shortfalls.

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Q21

Which one of the following is a component of free market systems?

A) Command system
B) Involuntary exchange system
C) Private property system
D) None of the given

AI Explanation

A private property system is one of the core pillars of a free market economy, alongside voluntary exchange. Command systems and involuntary exchanges run counter to free market principles.

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Q22

Which of the following is NOT a determining factor of economy?

A) Poverty level
B) Monetary policy
C) Wage and price levels
D) Property rights

AI Explanation

Monetary policy, wage and price levels, and property rights are fundamental economic determinants or mechanisms that directly shape economic activity. Poverty level is an outcome or indicator of economic conditions rather than a determining factor of the economy itself.

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Q23

Who argued in response to the free market and utility by Adam Smith that government should intervene because there is a mismatch between the aggregate supply and demand?

A) John Hicks
B) Herbert Spencer
C) Charles Darwin
D) Maynard Keynes

AI Explanation

John Maynard Keynes argued that a mismatch between aggregate supply and aggregate demand can cause prolonged economic downturns like the Great Depression. He advocated for active government fiscal intervention to stabilize output and employment.

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Q24

Which of the following use a command system?

A) None of the given options
B) Free market system
C) Pure free market system
D) Communitarian system

AI Explanation

Command systems rely on centralized government planning and resource allocation, which is the direct opposite of free markets, pure free markets, and community-driven communitarian systems.

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Q25

Naturalistic Fallacy refers to:

A) Everything that is good it must be natural
B) If something happens naturally is always good
C) None of the given options
D) Good is same as natural property

AI Explanation

In philosophy, the naturalistic fallacy refers to the mistake of trying to define the moral term 'good' in terms of some natural property, such as pleasant or evolutionary fit. G.E. Moore argued that goodness is a unique, unanalyzable property that cannot be reduced to purely natural terms.

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Q26

“Individuals have purchase options”, this refers to which of the following feature of market economy?

A) Price flexibility
B) Price discrimination
C) Free enterprise
D) Free choice

AI Explanation

The ability of individuals to have purchase options and select what goods or services to buy reflects the feature of free choice in a market economy. It empowers consumers to direct their purchasing power according to personal preferences.

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Q27

Which theory includes means of production and selling one's labor?

A) None of the above
B) Socialist system
C) Capitalist systems
D) Free economy system

AI Explanation

Capitalist systems are characterized by private ownership of the means of production where individuals sell their labor power as a commodity in exchange for wages. This structural dynamic forms the foundational economic relationship in capitalism.

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Q28

The price that just covers the costs of producing the commodity, including the going rate of profit obtainable in other markets is known as:

A) None of the given options
B) Natural Price
C) Buying Price
D) Selling Price

AI Explanation

Adam Smith defined the 'natural price' as the price that is just high enough to cover the ordinary costs of producing a commodity, including wages, land rent, and the standard rate of profit. It serves as the long-term equilibrium price toward which market prices gravitate.

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Q29

The kind of care that is owed to those with whom we have special concrete relationships is known as?

A) Standards of justice
B) Standards of caring
C) Utilitarian standards
D) None of the above

AI Explanation

Standards of caring emphasize our moral obligation to look after the well-being of specific people with whom we share close, concrete relationships, such as family, friends, and coworkers. This ethical framework prioritizes partiality and connection over abstract universal rules.

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Q30

Who proposed utilitarian argument?

A) John Rawls
B) Alasdair MacIntyre
C) Adam Smith
D) John Locke

AI Explanation

Adam Smith contributed significantly to early utilitarian arguments by emphasizing how individual economic self-interest and free markets maximize the overall wealth and well-being of society. While thinkers like Jeremy Bentham later formalized utilitarianism, Smith's economic framework heavily relies on maximizing aggregate societal utility.

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Q31

According to Aristotle, which of the following enable humans to act in accordance with their specific purpose?

A) Moral responsibility
B) None of the given options
C) Moral standards
D) Moral Virtues

AI Explanation

Aristotle argued that moral virtues are dispositions to act in ways that align with human reason and purpose, enabling individuals to achieve eudaimonia (human flourishing). These virtues represent the golden mean between excess and deficiency.

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Q32

Who is called the father of modern economics?

A) Adam Smith
B) Karl Marx
C) John Maynard Keynes
D) John Locke

AI Explanation

Adam Smith is widely recognized as the father of modern economics due to his foundational work 'The Wealth of Nations'. He introduced key concepts like the division of labor, the invisible hand, and free-market capitalism.

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Q33

In which year Adam Smith asserted that the wealth of a nation consisted of the goods and services available to its citizens?

A) 1876
B) 1776
C) 1976
D) 1676

AI Explanation

In 1776, Adam Smith published his monumental work 'The Wealth of Nations', where he asserted that a nation's true wealth consists of the goods and services available to its citizens rather than merely its stockpiled gold or silver.

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Q34

Which of the following is/are feature(s) of market Economy?

A) Price flexibility
B) All of the given options
C) Free enterprise
D) Free choice

AI Explanation

A market economy is characterized by price flexibility, free enterprise, and free choice. These features work together to allow supply, demand, and individual autonomy to dictate resource allocation.

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Q35

Which one of the following is not considered as a moral standard?

A) Respect moral rights
B) Maximize social utility
C) Exercise caring
D) Undistribute benefits and burdens

AI Explanation

Moral standards focus on the fair and just distribution of benefits and burdens, whereas 'undistribute' implies failing to distribute them properly. The recognized moral standards include respecting moral rights, maximizing social utility, exercising caring, and distributing benefits and burdens fairly.

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Q36

Which one of the following ethic sees concrete communities and communal relationships as having a fundamental value?

A) Socialism
B) The care of ethic
C) Demands of caring
D) Communitarian ethic

AI Explanation

The communitarian ethic specifically views concrete communities and communal relationships as possessing fundamental moral value. It emphasizes that individual identity and obligations are deeply intertwined with community traditions and shared values.

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Q37

Which one of the following is an alternative to moral principles?

A) Real Ethics
B) Virtue Ethics
C) None of the above
D) Logic Ethics

AI Explanation

Virtue ethics focuses on moral character and virtues rather than abstract rules or duties, serving as a distinct alternative approach to principle-based moral frameworks like deontology and utilitarianism.

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Q38

Survival of the best is school of thought known as?

A) Social Darwinism
B) Social Justice
C) Social equity
D) None of the above

AI Explanation

Social Darwinism is the social and political ideology that applies biological concepts of natural selection and survival of the fittest to human societies, often arguing that the strong should see their wealth and power increase while the weak are left behind.

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Q39

Who has used the theory of natural right by Locke to argue for free market?

A) Alasdair MacIntyre
B) John Locke
C) Adam smith
D) Friedrich A. Hayek

AI Explanation

Friedrich A. Hayek, along with other classical liberals and libertarian thinkers, utilized John Locke's theory of natural rights—particularly the right to private property—to vigorously defend free-market capitalism.