Which one of the following countries does not follow Capitalist economic system
Options
AUSA
BUK
CGermany
DIndia
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Introduction to Business EconomicsMTP Nov 22Question 698 of 209
All Questions Correct Answer
✅ Option d — India
All Options:
- AUSA
- BUK
- CGermany
- DIndia
Detailed Solution & Explanation
• The question asks to identify the country that does not primarily follow a Capitalist economic system among the given options.
• A Capitalist economic system (also known as a market economy) is characterized by private ownership of the means of production, profit motive, competition, and minimal government intervention. Decisions about production, investment, and distribution are largely determined by supply and demand in markets.
• Let's analyze the options:
• USA: The United States is a prime example of a capitalist economy, with strong emphasis on private enterprise, free markets, and limited government intervention.
• UK: The United Kingdom also operates predominantly under a capitalist system, though it incorporates elements of a welfare state.
• Germany: Germany has a social market economy, which is a form of capitalism that combines a free-market capitalist economic system with social policies that establish fair competition and a welfare state. It is still fundamentally capitalist.
• India: India follows a Mixed Economic System. This means it combines elements of both capitalism and socialism. While it has a significant private sector and market forces, the government also plays a substantial role in economic planning, public sector enterprises, and social welfare programs. This is a departure from a purely capitalist model.
• Therefore, India is the country that does not solely follow a Capitalist economic system; instead, it operates under a Mixed Economic System.
• The correct answer is (D) India because it is a mixed economy, unlike the USA, UK, and Germany which are primarily capitalist economies (though Germany has a social market variant).
About This Chapter: Introduction to Business Economics
Paper
Paper 4: Business Economics
Weightage
5%
Key Topics
Meaning, Scope, Price Mechanism
This chapter lays the groundwork for understanding Business Economics as a discipline. It covers the meaning, scope, and nature of economics — including key distinctions like Microeconomics vs Macroeconomics, Positive vs Normative economics, and the fundamental economic problem of scarcity. Students learn how businesses use economic principles for decision-making in a competitive marketplace.
View Official ICAI SyllabusExam Strategy Tip
Focus on definitions and distinctions between concepts. Questions often test whether you understand the difference between Micro and Macro, or Positive and Normative statements.
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