New Economic Theories — Quiz

Question 9 • Contemporary Studies

In terms of production, what best describes the difference between capitalism and socialism?

Answer

Capitalism is a system in which the government controls production, but socialism stresses production by private businesses.

Capitalism is a system in which people pursue their own self-interests, but socialism stresses an equal distribution of wealth.

Capitalism is a system in which goods are made by private businesses, but socialism stresses government control over production.

Capitalism is a system in which government should “plan” the economy, but socialism stresses that free market dictates production.

Explanation

Capitalism generally relies on private businesses and individuals to own productive resources and decide what to produce. Socialism gives the government or society greater control over production and the distribution of resources. Therefore, choice B best describes the difference; choice D touches on related ideas but does not directly describe who controls production.

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