CA Foundation P4 · Chapter 1 · Question 9 of 15
Which of the following is commonly cited as a major demerit of a capitalist economy?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) Wide inequalities in the distribution of income and wealth
Explanation
Free markets reward ownership of property and capital, which tends to concentrate income and wealth. Capitalism generally provides strong incentives and consumer choice; lack of incentives and bureaucratic control are criticisms usually directed at socialist economies.
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