Question

Which among the following is a guiding factor for the capitalist economy?

Options

• Profit motive

• Private property

• Both profit motive and private property

• Neither profit motive nor private property

Answer 1

Both profit motive and private property

Explanation:

The guiding factors for a capitalist economy are both the profit motive and private property. In capitalism, private ownership of means of production is fundamental, and all economic activities are guided by the aim to earn maximum profit. Producers produce goods that yield the highest profit and private property rights allow individuals to own and transfer property. Hence, both profit motive and private property are central to capitalist economies.