Practicing Success

Target Exam

CUET

Subject

Economics

Chapter

Indian Economic Development: Indian Economy:1950-1990

Question:

On what basis are the goods distributed in a "Capitalistic economy"?

Options:

On the basis of purchasing power

On the basis of the need of individual

On the basis of desire of individual

None of the above

Correct Answer:

On the basis of purchasing power

Explanation:

A capitalist market structure works for profit motive. The goods which are produced and distributed are those whose demand is accompanied by the individual's  purchasing power. For example: Supply for low cost housing will not be there as poor people will lag in the ability to purchase despite of having need for the same.