Q.What is meant by an economic system? Name the three main types of economic systems.

A mixed economy means the coexistence of the public and private sectors — option (b).

A mixed economy blends the market (capitalist) system and state (socialist) control. In it:

• The private sector owns and runs many enterprises, guided by the profit motive and market forces.
• The public sector (government) owns and operates key industries and provides essential services, guided by social welfare and planning.

Both sectors coexist and function together, which is exactly what option (b) states. India adopted a mixed-economy model after independence. The other options describe only parts (public sector only, or a sector plus banks) and miss the essential idea of coexistence of both sectors.

The correct option is (a) like value added tax: GST is a destination-based, value-added levy on the supply of goods and services.

Goods and Services Tax (GST), introduced in India from 1 July 2017, replaced a host of central and state indirect taxes (excise, service tax, VAT, etc.) with a single tax on the supply of goods and services. Its defining design feature is the input tax credit — at every stage a seller pays tax only on the value added and sets off the tax already paid on inputs. This is exactly the mechanism of a value added tax, and it is what eliminates the earlier "cascading" (tax-on-tax) effect.

Why the others are wrong: (b)/(c) misstate its structure — GST is levied at multiple points of the supply chain, not a true single-point tax; (d) is the opposite of the truth, since GST removes the cascading effect rather than having one.

A mixed economy means the co-existence of the public and private sectors.

In a mixed economy the economic system combines features of both capitalism and socialism: the private sector owns and runs businesses driven by the profit motive, while the public sector, owned by the government, provides essential goods, services and infrastructure and guides the economy toward social goals. Both sectors exist together, which is exactly the case in India. Hence a mixed economy is the co-existence of public and private sectors — a defining feature of the Indian economy studied in the Tamil Nadu HSC Class 11 Economics syllabus.

GST is described as a single (unified) tax that removes cascading effects.

Goods and Services Tax (GST) replaced a large number of separate central and state indirect taxes with a single, unified tax on the supply of goods and services. Its key merit is that, through the input tax credit mechanism, tax is charged only on the value added at each stage, so the earlier 'tax on tax' (cascading) burden is removed. Compared with the old multiple, cascading tax structure, GST is presented as one tax with no cascading effects. The other options describe the old regime (cascading effects) or an incomplete description, so they are not correct.