As an economic system, pure capitalism may have some flaws because?
a. if you don't really have any resoures, it is hard for you to enjoy the fruits of capitalism
b. each individual has very limited personal freedom in making economic choices
c. the economy runs smoothly with the market calling the shots, so to speak
d. central plans reflect more the preferences of a central planner than those of society
Answer:
I am assuming that your teacher made up this question, rather than being produced by the publishers of an economics textbook because the answers really aren't worded very well.
However, with the choices that you have, the answer is "a". Just imagine a person, for example, who is born with mental handicaps and also who happened to be born into a poor family. Although pure capitalism offers many advantages, for this person it basically leaves them out and certainly this person would not "enjoy the fruits of capitalism."
Some options are not really flaws and not really related to capitalism anyway. Can I say none of the above? If I have to pick 'b" seems more relevant.
Having said that pure capitalism is flawed because there is "friction" in the world -- that is markets are not perfect, time scales are not unlimited, exchanges are inefficient. This causes pure capitalism not to work well for such "public" things as defense. Some kind of central planning (however inefficient) may be necessary to reduce these "flaws".
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b. each individual has very limited personal freedom in making economic choices
c. the economy runs smoothly with the market calling the shots, so to speak
d. central plans reflect more the preferences of a central planner than those of society
Answer:
I am assuming that your teacher made up this question, rather than being produced by the publishers of an economics textbook because the answers really aren't worded very well.
However, with the choices that you have, the answer is "a". Just imagine a person, for example, who is born with mental handicaps and also who happened to be born into a poor family. Although pure capitalism offers many advantages, for this person it basically leaves them out and certainly this person would not "enjoy the fruits of capitalism."
Some options are not really flaws and not really related to capitalism anyway. Can I say none of the above? If I have to pick 'b" seems more relevant.
Having said that pure capitalism is flawed because there is "friction" in the world -- that is markets are not perfect, time scales are not unlimited, exchanges are inefficient. This causes pure capitalism not to work well for such "public" things as defense. Some kind of central planning (however inefficient) may be necessary to reduce these "flaws".
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