With reference to the "Dual Pricing" system in China, consider the following statements: 1. It was part of the reform process. 2. Inputs and outputs were transacted only at market prices. 3. Over the years, the proportion of goods transacted in the market increased. Which of the statements given above is/are correct?

The correct option is 1 and 3 only. Explanation The "Dual Pricing" system was a transitional economic mechanism implemented by China during its economic reforms starting in 1978. It was designed to gradually shift the economy from a centrally planned command economy to a "socialist market economy" by allowing market forces to operate alongside state planning. Statement-wise Analysis: - Statement 1 is Correct: The dual pricing system was a core component of China's industrial and agricultural reform process. It allowed the state to maintain stability while introducing market incentives without a sudden "shock therapy" approach. - Statement 2 is Incorrect: As the name suggests, the system involved two distinct pricing tracks, not just market prices. Farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs at government-fixed prices. Only the production exceeding these mandatory quotas could be sold at market prices. - Statement 3 is Correct: The system was dynamic. Over time, the state gradually reduced the proportion of goods covered under mandatory quotas (fixed prices) and increased the proportion of goods traded at market prices. This facilitated a smooth transition to a full market-based pricing mechanism. Key Takeaway: China's Dual Pricing System involved a two-track approach: a planned track (state-set prices for quotas) and a market track (market prices for surplus), allowing a gradual transition from a command to a market economy.

With reference to the "Dual Pricing" system… - NCERT Class 11 Economics MCQ

NCERT Class 11 Economics — Chapter 9: Comparative Development Experiences of India and its Neighbours

mcqmedium

With reference to the "Dual Pricing" system in China, consider the following statements:

It was part of the reform process.
Inputs and outputs were transacted only at market prices.
Over the years, the proportion of goods transacted in the market increased.

Which of the statements given above is/are correct?

NCERT textbook question

From NCERT Indian Economic Development · Page 136

Options

A1 only
B1 and 3 only
C2 only
D1, 2 and 3

Did you get this right?

Solution

The correct option is 1 and 3 only.

Explanation

The "Dual Pricing" system was a transitional economic mechanism implemented by China during its economic reforms starting in 1978. It was designed to gradually shift the economy from a centrally planned command economy to a "socialist market economy" by allowing market forces to operate alongside state planning.

Statement-wise Analysis:

Statement 1 is Correct: The dual pricing system was a core component of China's industrial and agricultural reform process. It allowed the state to maintain stability while introducing market incentives without a sudden "shock therapy" approach.
Statement 2 is Incorrect: As the name suggests, the system involved two distinct pricing tracks, not just market prices. Farmers and industrial units were required to buy and sell fixed quantities of inputs and outputs at government-fixed prices. Only the production exceeding these mandatory quotas could be sold at market prices.
Statement 3 is Correct: The system was dynamic. Over time, the state gradually reduced the proportion of goods covered under mandatory quotas (fixed prices) and increased the proportion of goods traded at market prices. This facilitated a smooth transition to a full market-based pricing mechanism.

Key Takeaway:
China's Dual Pricing System involved a two-track approach: a planned track (state-set prices for quotas) and a market track (market prices for surplus), allowing a gradual transition from a command to a market economy.

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More from Chapter 9: Comparative Development Experiences of India and its Neighbours

With reference to the introduction of the Green Revolution in Pakistan, consider the following statements: 1. It led to mechanisation in select areas. 2. It resulted in an increase in public investment in infrastructure. 3. It caused a decline in the production of foodgrains due to a focus on cash crops. Which of the statements given above is/are correct?

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