BBA 1st Year Business Environment Economic Systems Short Question Answer
BBA 1st Year Business Environment Economic SystemsShort Question Answer: BBA Semester II Business Environment Book Economic Systems Code 205 Important Question With Answers 2019 New Syllabus. Based on the latest syllabus of BBA including Economic Systems – Capitalism, Socialism, Communism, Mixed Economy Public Sector and Private Sector
BBA 1st Year Question Answers Index
Q. 1. Write down ally five needs of public enterprises in India.
Ans. The needs of public enterprises in India are:
- Social Justice: Public enterprises ensure social justice, efforts are made by these enterprises to sates& all possible human needs. Inequalities of income are reduced to a minimum and national income is distributed equally.
- Economic Stability: Public enterprises work under the guidance of a central planning authority. These enterprises minimize the occurrence of trade cycles. It prevents the imbalance between demand and supply and creates economic stability.
- Necessary for Planned Economic Development: India has adopted the path of planned economic development. Public enterprises have been assigned a great responsibility in the process of economic development.
- A check on Private Sector Monopolies A great reason for the development of public sector enterprises in India is that these enterprises keep a check on private sector monopolies.
- Generation of Surplus: Generation of profit or surplus by public enterprises directly profit the strength of finance department of the government.
Q. 2. Explain the difference between capitalism and socialism.
Ans. Capitalism is an economic system where resources (whether monetary or otherwise) are privately owned. Socialism, on the other hand, is a system where goods are owned by the state or the public. In capitalism, everyone works for their own wealth, while in socialism, everyone works for wealth that is distributed equally to everyone.
Q. 3. What are the steps which suggest improving the public sector performance?
Ans. Some of the major steps which suggest improving public sector performance are:
In 1951 administrative reforms commission was set up:
- IJNO constituted ECAFE for the economic development of Asian countries.
- In 1956 two American scholars Prof. Gilbert and Dr. Appleby were invited to India to study F the problems of public enterprises.
- Gorwala committee was appointed at the directives of the planning commission.
Q. 4. Explain the reasons behind low profitability in public enterprises.
Ans. Some of the reasons for low profitability maybe:
- Defective price structure as the prices of goods and services are determined by Bureau of industrial cost and prices in view of social factors.
- Public enterprises are run on social and political principles and not on commercial principles.
- Administrative problems are red-tapism, delay in project completion, undue political interference.
- Personnel problems are lack of well-defined policy, overstaffing, key posts remaining vacant for a long time, etc.
Q. 5. Give a few characteristics of a government company.
- Ans. According to section 667 of the Indian Companies Act — 1956 – “A government company is one in which not less than 51% of paid-up share capital is held by central government or state government.”
- The characteristics of a government company are as follows:
- A major contribution by government in share capital.
- Government company incorporated under existing companies Act 1956.