Capitalist World Economy Flashcards, test questions and answers

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What is Capitalist World Economy?

Capitalism is the world’s most dominant economic system. It is an economic system characterized by private ownership of capital goods and free markets driven by supply and demand. The primary goal of capitalists is to accumulate wealth through investment and trade. Capitalists believe that the pursuit of profit will drive innovation and progress, leading to greater economic growth, increased standards of living, and social stability.Despite its dominance in global economics, capitalism has been criticized for its flaws. Inequality between classes has been linked to capitalism’s emphasis on competition and individualism over equality or collective action. Moreover, critics argue that capitalism fails to address important issues such as poverty or environmental degradation as it relies on a market driven approach where those with money are able to purchase resources at the expense of those without money or resources.However, many economists agree that there are benefits to a capitalist world economy. Free markets allow businesses to compete more effectively than they could in a heavily regulated environment; this leads to increased efficiency which helps reduce prices for consumers while simultaneously increasing profits for businesses. Additionally, free markets encourage entrepreneurship which helps spur innovation; these innovations can create jobs while also driving technological advancement across all sectors of society. Finally, capitalists have argued that their system creates incentives for people who work hard by rewarding ambition with wealth; this encourages people from all backgrounds to strive for success which can lead to greater productivity within society as a whole. Overall it can be said that despite its flaws capitalism is still the most dominant form of economic systems globally due largely thanks in part due its ability foster competition and reward ambition which ultimately leads towards long-term growth and development both nationally as well as worldwide .