An economic system based on private property and free enterprise is best described by which term?

• A. Capital
• B. Market Economy
• C. Communism
• D. Socialism

Answer: (A)

This item tests recognizing economic systems by who owns property and how decisions are made about production. When private property is protected and individuals are free to own resources and run businesses to make a profit, the system is capitalist. The term capital captures this setup because it centers on private ownership of capital (land, buildings, equipment) and investment driving production in a market-driven economy.

Market Economy describes how decisions are made via markets, but it isn’t naming the overall system. Communism and Socialism describe systems with public or collective ownership and varying levels of government control, which contrast with private-property freedom. So, the best fit is capital.