A major disadvantage of a capitalist economy is... - JAMB Economics 2022 Question
A major disadvantage of a capitalist economy is that it
A
leads to low production of goods and services
B
requires large number of officials to operate
C
considers individual consumers' satisfaction
D
worsens income inequality among the citizens
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Correct Option: D
A capitalist economy, while often efficient in production, is known to exacerbate income inequality. This is because the system allows for private ownership of resources and the accumulation of wealth, which can lead to significant disparities between those who own capital and those who rely on labor.
- Option A: Incorrect. Capitalist economies are typically characterized by high production due to profit motives.
- Option B: Incorrect. Capitalist economies are often less reliant on government intervention, thus requiring fewer officials compared to a centrally planned economy.
- Option C: Incorrect. While consumer satisfaction is considered, it's not a major disadvantage. The profit motive drives producers to cater to consumer needs, but this is not the primary disadvantage.
- Option D: Correct. Income inequality is a significant drawback of capitalist systems.
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