Question

If the United States government were to regulate its financial structures, including banks and businesses, which of the following criteria of a capitalist economy would it violate?

a. Consumer interests affect capitalism.
b. Prices and wages are set by supply and demand.
c. Privately owned resources are used to make a profit.
d. Government involvement in businesses and markets must be limited.

Answer 1

Government involvement in businesses and markets must be limited.

Answer 2

The correct answer is D. Government involvement in businesses and markets must be limited, and when the government regulates the interest rate, it artificially influences supply and demand. In a capitalist economy, the supply and demand is determined by the interactions between buyer and seller.