What is capitalism?

Economic System

The correct answer is Option 2: Economic System.

Option 1: Political System — Incorrect. Capitalism is not a political system. It deals with the organisation of economic activities, ownership of resources and production.

Option 2: Economic System — Correct. Capitalism is an economic system in which the means of production are privately owned and production is organised to generate profit within a market system.

Option 3: Social System — Incorrect. Although capitalism can influence social relationships and lifestyles, it is primarily an economic system based on ownership and production.

NCERT: Capitalism is primarily an economic system rather than a political or social system. It is characterized by private ownership of the means of production (such as factories and businesses), profit-driven economic activity, and the market allocation of goods and services. In a capitalist system, decisions about investment, production, and distribution are driven by individual or corporate profit motives rather than centralized government planning.