Which statement best defines capitalism?

• A. An economic system where the government owns production
• B. An economic system characterized by private ownership for profit
• C. An economic system focused on equality among all citizens
• D. An economic system based solely on bartering goods

Answer: (B)

The statement that capitalism is defined as an economic system characterized by private ownership for profit accurately captures the essence of capitalism. In this system, individuals and businesses own and control the means of production—such as factories, machinery, and technology—and they operate these resources with the goal of generating profit. This emphasis on private ownership distinguishes capitalism from other economic systems, such as socialism or communism, where the government typically owns and controls production.

Additionally, capitalism promotes competition and consumer choice, leading to innovation and a variety of goods and services on the market. The motivation for profit drives businesses to improve efficiency and meet consumer demands, which can contribute to overall economic growth. Hence, the focus on private ownership and profit generation is fundamental to understanding how capitalism operates within the broader framework of economic systems.