Assertion (A): In a capitalist country, the factors of production earn their incomes through the process of production and sale of the output in the market.
Reason (R): In a capitalist country, most of the production is carried out by peasant families for their own consumption.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → (A) is true but (R) is false.
In a capitalist country, factors earn incomes through production and sale in the market. Production there is carried out mainly by capitalist enterprises, not peasant families.
Assertion (A): In a capitalist country, the factors of production earn their incomes through the process of production and sale of the output in the market. — True. Wages, rent, interest and profit all come out of the revenue from sales.
Reason (R): In a capitalist country, most of the production is carried out by peasant families for their own consumption. — False. Peasant family farming is found in many underdeveloped countries. In a capitalist country production is mainly by capitalist enterprises for the market.
NCERT (2026-27): “1.2 Context of the Present Book of Macroeconomics … In a capitalist country production activities are mainly carried out by capitalist enterprises. …” “… In many underdeveloped countries production (in agriculture especially) is carried out by peasant families. … It is to be noted that in a capitalist country the factors of production earn their incomes through the process of production and sale of the resultant output in the market. …” |