Question

What are the characteristics of a capitalist economy?

1. Ownership of the means of production is primarily with private individuals.
2. The main motive for economic activity is profit.
3. There is a high degree of government control and planning.
4. Consumer sovereignty and competition among entrepreneurs are key features.

• A. 1, 3
• B. 3, 4
• C. 4
• D. 1, 2, 4

Answer 1

Answer:

D. 1, 2, 4

Capitalist economy

Capitalist economy is the economy in which the ownership of means of production is with private individuals who work with the motive of making profits. Other features of capitalist economy are as follows:

Freedom of the entrepreneurs to produce any commodity

Right to private property

Profit motive

Transfer of wealth to legal heir

Free market with no control over price

Consumer’s sovereignty

Competition among entrepreneurs to sell products