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Which among the following term describes that "An Institution which organises the free interaction of individuals pursuing their economic activities"?
1. Company
2. Budget
3. Factory
4. Market

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Correct Answer - Option 4 : Market

The correct answer is market.

  • Market is an Institution that organizes the free interaction of individuals pursuing their economic activities.


  • A setup where two or more parties engage in an exchange of goods, services, and information is called a market.
    • Physical Markets - Physical market is a setup where buyers can physically meet the sellers and purchase the desired merchandise from them in exchange for money. Shopping malls, department stores, retail stores are examples of physical markets.
    • Non Physical Markets/Virtual markets - In such markets, buyers purchase goods and services through the internet. In such a market the buyers and sellers do not meet or interact physically, instead the transaction is done through the internet. Examples - Rediff shopping, eBay, etc.
    • Auction Market - In an auction market the seller sells his goods to one who is the highest bidder.
    • The market for Intermediate Goods - Such markets sell raw materials (goods) required for the final production of other goods.
    • Black Market - A black market is a setup where illegal goods like drugs and weapons are sold.
    • Knowledge Market - A knowledge market is a setup that deals in the exchange of information and knowledge-based products.
    • Financial Market - Market dealing with the exchange of liquid assets (money) is called a financial market. Financial markets are of the following types.
      • Stock Market - A form of market where sellers and buyers exchange shares is called a stock market.
      • Bond Market - A marketplace where buyers and sellers are engaged in the exchange of debt securities, usually in the form of bonds is called a bond market. A bond is a contract signed by both parties where one party promises to return the money with interest at fixed intervals.
      • Foreign Exchange Market - In such type of market, parties are involved in the trading of currency. In a foreign exchange market (also called a currency market), one party exchanges one country’s currency with an equivalent quantity of another currency.
      • Predictive Markets - Predictive market is a setup where the exchange of goods or services takes place for the future. The buyer benefits when the market goes up and is at a loss when the market crashes.


  • company is a legal entity formed by a group of individuals to engage in and operate a business, commercial or industrial enterprise.
  • Company members share a common purpose and unite to achieve specific, declared goals.
  • A company is a body corporate or an incorporated business organization registered under the companies act. 
  • Companies are to be classified on the basis of liabilities, members, and the basis of control.
    • The companies on the basis of liabilities are:
      • Companies Limited by Shares.
      • Companies Limited by Guarantee.
      • Unlimited Companies.
    • The companies on the basis of members are:
      • One Person Companies.
      • Private Companies.
      • Public Companies.
    • The companies on the basis of control are:
      • Holding and Subsidiary Companies.
      • Associate Companies.


  • The Constitution refers to the Budget as the 'Annual Financial Statement'.
  • The budget is laid before Parliament in the name of the President.
  • The central ministry decided to merge the General Budget and the Railway Budget on 21st September 2016.
  • The General Budget has a total of 109 demands (103 for civil expenditure and 6 for defense expenditure).
  • The Railway Budget has 32 demands.
  • The Union Finance Minister presents the Union Budget every year in the Parliament that contains the Government of India revenue and expenditure for one fiscal year which begins on 1st April and ends on 31st March of the following year.
  • India's first Union Budget was presented by the first Finance minister, RK Shanmukham Chetty on November 26, 1947.
  • Former Prime Minister Indira Gandhi was the first Indian woman Finance minister and to have presented the budget in her capacity as the Prime Minister of India in 1978.
  • C. D. Deshmukh was India's first Governor of RBI to have presented the interim Budget for the year  (1951-1952).
  • The budget of 1973-1974 is known as the 'Black Budget' due to the budget deficit.


  • A factory is an industrial site or set of buildings where large amounts of goods are made using machines.
  • A factory is defined as something that can be made or assembled things quickly and in great quantities.
  • They are a critical part of modern economic production, with the majority of the world's goods being created or processed within factories.

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