Which statement about capitalism is the most accurate?

• A. Capitalism requires all resources to be owned by the government.
• B. Capitalism eliminates competition among firms.
• C. Capitalism guarantees equal income for all citizens.
• D. Capitalism is an economic system in which private individuals own and control the means of production.

Answer: (D)

Verified step by step guidance

1. Understand the definition of capitalism: It is an economic system where private individuals or businesses own and control the means of production, rather than the government.
2. Evaluate each statement by comparing it to the definition of capitalism: For example, capitalism does not require government ownership of resources; instead, resources are typically privately owned.
3. Recognize that capitalism encourages competition among firms, as businesses compete to provide goods and services efficiently and profitably.
4. Note that capitalism does not guarantee equal income for all citizens; income distribution depends on market outcomes and individual efforts.
5. Conclude that the most accurate statement is the one that aligns with the core principle of capitalism—private ownership and control of production.