which of the following is true about capitalism?
a.it is bases on a free market economy
b.it is a form of mercantilism
c.it is based on a command economy
d.it was practiced in Europe before the united states
The correct statement about capitalism from the given options is:
a. It is based on a free market economy.
Capitalism is an economic system that is characterized by private ownership of the means of production and distribution of goods and services. In a capitalist system, individuals and businesses operate in a free market, where prices are determined by supply and demand.
To determine which statement is true about capitalism, let's analyze each option:
a. It is based on a free market economy: This statement is true. Capitalism is an economic system that relies on a free market, where the means of production are privately owned and operated for profit.
b. It is a form of mercantilism: This statement is false. While both capitalism and mercantilism are economic systems, they differ in significant ways. Mercantilism emphasizes government regulation and control of trade, whereas capitalism prioritizes free-market competition and limited government intervention.
c. It is based on a command economy: This statement is false. In a command economy, the government centrally plans and controls economic activities. Capitalism, on the other hand, is decentralized and allows individual actors to make economic decisions based on self-interest.
d. It was practiced in Europe before the United States: This statement is true. Capitalism has historical roots in Europe and emerged during the transition from feudalism to modern economic systems. While capitalism was practiced in Europe before the United States, it eventually expanded and became a prevailing economic system worldwide.
Based on the explanations above, the correct answer is option a: Capitalism is based on a free market economy.