Question

What are the disadvantages of capitalist economy?

• A. Labourers are exploited
• B. Profit motive economy
• C. No relation with social welfare
• D. All of the above

Answer 1

Answer: (D)

All of the above

The capitalist economy is:

1.)Where the instruments of production, which are land, labor, capital are owned and operated by private individuals or organizations.

2.)This system is also called the ‘free enterprise economy’ because there is no government interference in the working of economic activities.

3.)The main motive of all organizations behind the economic activity is profit-driven.

4.)In this, the system, the laborers are made to work for long hours but are paid less so that the employer can earn greater margin/profit.

Thus, we see that the capitalist economy is the one that is profit-driven, social welfare is not taken care of and thus the laborers are exploited.