What economic system is characterized by private ownership of resources and businesses?

The economic system characterized by private ownership of resources and businesses is capitalism. In a capitalist system, individuals and corporations own and control property and trade, with the goal of generating profit. This setup encourages competition and innovation, as businesses strive to improve their products and services to meet consumer demands.

Capitalism operates on the principle of free markets, where supply and demand dictate prices and the availability of goods and services. This system allows for individual entrepreneurship, meaning people can start their own businesses and engage freely in economic activities, provided they follow the laws of the land.

Understanding capitalism is crucial because it contrasts with other economic systems. For example, socialism advocates for collective or government ownership of resources and production, intending to promote equality and reduce disparities in wealth. Communism goes further by seeking to eliminate class distinctions entirely, proposing a system where all property is publicly owned. Feudalism is an outdated system based on land ownership and a hierarchy of obligations primarily seen in medieval Europe, characterized by relationships between lords and vassals.

By grasping these distinctions, it becomes clear why capitalism, with its emphasis on private ownership and market-driven economics, is the answer to the question.