Economic Awareness - Sectors of Indian Economy
Which of the following statements correctly differentiates 'Economics' from 'Economy'?
Which of the following statements correctly differentiates 'Economics' from 'Economy'?
medium Q4 of 15
Step-by-Step Solution
Step 1: Understand the difference
Economics is the social science studying how scarce resources are allocated, while Economy is the actual system of production, distribution, and consumption.Step 2: Analyze options
Economics studies how scarce resources are allocated; Economy is the system of production and consumption correctly differentiates the two terms. Economics is the actual system of economic activities; Economy is the study of resource allocation reverses the definitions. Economics and Economy both mean the same and can be used interchangeably is incorrect as the terms are not synonyms. Economics is concerned only with money; Economy is concerned only with goods wrongly restricts Economics and Economy to money and goods respectively.Final Answer:
Economics studies how scarce resources are allocated; Economy is the system of production and consumption → Option BQuick Check:
Economics = study; Economy = system ✅
Quick Trick: Economics explains; Economy operates.
Common Mistakes:
MISTAKES- Reversing definitions or treating terms as synonyms.
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