Which of the following best describes a society that uses pure capitalism as its economic system?

• A. Most goods and services are provided free of charge by the government.
• B. Economic activity is based primarily on tradition and custom.
• C. Resources are privately owned and allocation is determined by market forces.
• D. The government owns all resources and makes all economic decisions.

Answer: (C)

Verified step by step guidance

1. Understand the key characteristics of pure capitalism: in this system, resources (such as land, labor, and capital) are privately owned rather than owned by the government or community.
2. Recognize that in pure capitalism, the allocation of resources and goods is determined by market forces, which means supply and demand interact freely without government intervention.
3. Contrast pure capitalism with other economic systems: for example, in a command economy, the government owns resources and makes decisions; in a traditional economy, customs and traditions guide economic activity; and in a welfare state, the government may provide goods and services free of charge.
4. Identify that the statement 'Resources are privately owned and allocation is determined by market forces' aligns with the defining features of pure capitalism.
5. Conclude that the best description of a society using pure capitalism is one where private ownership and market-driven allocation prevail, distinguishing it from other economic systems.