What do you understand by the term "Capitalism"?
Answer & explanation
Correct answer: option 1
Capitalism is that economic system, where the production activity is controlled by the private sector and there is no intervention by the government. The demand and supply is totally based on the market forces. Here, the purchasing power decides the goods which are to be produced and not the need of an individual. They work only for profit motive and not for the welfare of the society.