Which statement best describes a capitalist economy?
A) Society determines production and the allocation of goods and services only through markets.
B) Government policies determine the production and the allocation of goods and services.
C) Government policies determine the production,but not the allocation,of goods and services.
D) The role of individual self-interest is relatively unimportant because government makes most economic decisions.

Question

Quizplus · Accepted Answer

A capitalist economy allows individuals and businesses to engage in free markets to produce and distribute goods and services based on supply and demand. The government's role is limited to creating and enforcing laws to ensure a level playing field, protecting property rights, and enforcing contracts, but it does not determine what is produced or how resources are allocated. Instead, prices, profits, and losses transmit information to producers and consumers in the market, which guides their decisions on what to produce and consume.

Which Statement Best Describes a Capitalist Economy