Theory question 102
Political Ideologies(a) Define Capitalism.
(b) State two advantages and two disadvantages of capitalism.
Show the model answer
Model answer
(a) Capitalism is an economic and political system in which the means of production are privately owned and operated for profit, with prices set by the free market.
(b) Advantages (any two): encourages initiative and hard work; efficiency through competition; consumer choice and variety; rapid economic growth and innovation.
Disadvantages (any two): wide gap between rich and poor; exploitation of workers; monopolies; neglect of unprofitable essential services; booms and depressions.
Explanation
Give exactly two of each; label them clearly.