Theory question 104
Economic Systems(a) What is an economic system?
(b) Outline any four features of a capitalist economy.
Show the model answer
Model answer
(a) An economic system is the way a society organises the ownership and use of its resources to decide what, how and for whom to produce.
(b) Any four: private ownership of the means of production; profit motive; price mechanism (market forces) allocates resources; consumer sovereignty; freedom of enterprise and choice; competition; little government interference; inequality of income and wealth.
Explanation
Define first, then give four distinct features with a short explanation each.