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. 

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.

Note: The statement in Option 4- Production takes place for the welfare of society 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. Hence, the given answer is marked as per NTA answer sheet herein.

"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)."