Which term describes an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state?

Which term describes an economic and political system in which a country's trade and industry are controlled by private owners for profit, rather than by the state?

• A. Market Economic System (Capitalism)
• B. Public Sector
• C. State-owned enterprises (SOEs)
• D. Privatisation

Answer: (A)

Private ownership and profit motive drive decisions about what to produce, how to produce, and for whom. In this system, individuals and firms own resources like land and factories, and markets determine prices that coordinate activity. The government’s role is mainly to enforce laws and property rights rather than run industries, so resource allocation happens through competition and consumer choice. This best matches capitalism, also known as a market economy. The other terms describe opposite arrangements or processes: the public sector and state-owned enterprises are owned by the government, and privatisation is the act of selling government-owned assets to private owners, moving toward private control but not defining the system itself.

Private ownership and profit motive drive decisions about what to produce, how to produce, and for whom. In this system, individuals and firms own resources like land and factories, and markets determine prices that coordinate activity. The government’s role is mainly to enforce laws and property rights rather than run industries, so resource allocation happens through competition and consumer choice.

This best matches capitalism, also known as a market economy. The other terms describe opposite arrangements or processes: the public sector and state-owned enterprises are owned by the government, and privatisation is the act of selling government-owned assets to private owners, moving toward private control but not defining the system itself.