Question

Which of the following is an economic system in which capital goods are owned by private individuals or businesses and the production of goods and services is based on supply and demand in the general market ?
1. Mixed Economy
2. Communist Economy
3. Capitalistic Economy
4. State Economy

Answer 1

Correct Answer - Option 3 : Capitalistic Economy

The Correct Answer is Capitalistic Economy.

 

• Capitalism is an economic system in which private individuals or businesses own capital goods.
• The production of goods and services is based on supply and demand in the general market.
• The purest form of capitalism is free market or laissez-faire capitalism.
• Here, private individuals are unrestrained.
• They may determine where to invest, what to produce or sell, and at which prices to exchange goods and services.

 

• Mixed Economy
  • A mixed economic system is a system that combines aspects of both capitalism and socialism.
  • A mixed economic system protects private property and allows a level of economic freedom in the use of capital, but also allows for governments to interfere in economic activities in order to achieve social aims.
• Communist Economy
  • Communist Economy advocates for a classless system in which the means of production are owned communally and private property is nonexistent or severely curtailed.