Capitalism

The video explains capitalism as an economic system where private firms own production means, contrasting it with command economies where the government controls production. Capitalism features decentralized decision-making, allowing private entities to respond to supply and demand, setting prices through market forces. While free enterprise suggests minimal government intervention, in reality, all countries have some government regulation. Capitalism is characterized by more free enterprise than command economies.

What is a key characteristic of capitalism compared to a planned economy?

• Private firms own the means of production

• Prices are set by the government

• Government controls all production

• There is no production of goods

In a capitalist system, who primarily makes decisions about production?

• The government

• Private businesses and individuals

• International organizations

• Non-profit organizations

How are prices determined in a capitalist economy?

• By non-profit organizations

• By government decree

• Through market forces

• By international agreements

What does a purely free enterprise system imply?

• High taxes on businesses

• Complete government control

• No government intervention

• Limited production of goods

Why is a purely free enterprise system rare?

• It leads to economic instability

• Governments do not exist

• All countries have some form of government regulation

• It is not supported by international law