Question

Which of the following are characteristics of capitalist economy?
A. Labour power and cost of production
B. Feudal lords
C. Production of goods
D. Barter exchange
E. Profit generation
Choose the correct answer from the options given below:

• A. A, B, C Only
• B. A, C, E Only
• C. B, C, D Only
• D. B, D, E Only

Hint:

Capitalism = Wage labor + Market production + Profit motive. Feudalism and Barter belong to past economic eras.

Answer 1

The Correct Option is B

Concept: Capitalism is an economic system characterized by the private ownership of the means of production, the focus on generating surplus value, and market-based distribution.

Step 1: A defining feature of capitalism is the commodification of labor power, where workers sell their labor for wages, and the employer closely monitors the cost of production to ensure efficiency.

Step 2: Capitalist economies are centered on the large-scale production of goods and services destined for exchange in a competitive market rather than for direct personal consumption.

Step 3: The ultimate driving force of a capitalist economy is the pursuit of profit; capital is reinvested into the production process to generate further surplus value and capital accumulation.

Step 4: "Feudal lords" (B) are central to the feudal system, a pre-capitalist structure, and "Barter exchange" (D) represents a pre-monetary economic model, neither of which defines a modern capitalist economy.

Step 5: Because A, C, and E accurately reflect the mechanisms of a capitalist system, option (2) is the correct choice. $$\boxed{\text{(2) A, C, E Only}}$$