(a) Define capitalism.
(b) State two advantages and two advantages of capitalism.
Explanation
(a) Capitalism can be defined as a political and economic system in which the means of production,distribution and exchange of goods and services are in the hands of individuals.
(b)Advantages: (i) Capitalism guarantees maximum freedom of enterprises.
(ii) It brings about increase in the quality of goods and services produced;
(iii) It creates room for effective use of talents.
(iv) It encourages numerous inventions and innovations.
(v) it encourages diverse economic development.
(vi) It leads to specialization.
(vii) It promotes hard work.
(viii) It encourages healthy competition.
(ix) it encourages private ownership of property.
(x) It encourages consumer sovereignty.
Disadvantages: (i) It encourages the exploitation of the poor by the rich
(ii) It leads to inequitable distribution of income and wealth
(iii) It may lead to unhealthy rivalry
(iv) It may threaten the sovereignty of the state
(v) It may lead to conflict between employers and employers and employees
(vi) It may lead to job insecurity
(vii) It does not consider public interest because of profit motive.