Which of the following is not a characteristic of a capitalist economy?

There is public ownership of means of production.

The correct answer is Option (2) → There is public ownership of means of production. 

Note: The given answer is as per NTA. However, there are two options incorrect for this question- Option 2 as well as Option 4 as explained belowe: 

Option 2:There is public ownership of means of production. this is false. "Public ownership of means of production" (meaning ownership by the state or community) is a defining characteristic of a socialist or communist economy, not a capitalist one. In a pure capitalist system, private ownership dominates. So, this statement is incorrect as a characteristic of capitalism.

Option 4- Production takes place for the welfare of society- It is also incorrect in the context of capitalist economy. Production is profit-oriented, not primarily for social welfare, though welfare may result indirectly through market forces.

Thus, both Option 2 and 4 are incorrect. However, NTA has considered only Option 2 as incorrect in its answer sheet. 

"A capitalist economy can be defined as an economy in which most of the economic activities have the following characteristics :

(a) there is private ownership of means of production

(b) production takes place for selling the output in the market

(c) there is sale and purchase of labour services at a price which is called the wage rate (the labour which is sold and purchased against wages is referred to as wage labour)."