Social Studies Praxis 2025 – 400 Free Practice Questions to Pass the Exam

The term that refers to the economic system where the means of production are privately owned is capitalism. In this system, individuals or businesses own and control property and resources, and they make decisions regarding production, distribution, and pricing based on their interests and the competitive market. Capitalism emphasizes free markets, voluntary exchange, and limited government intervention in the economy, allowing for innovation and individual entrepreneurship.

In contrast, communism is characterized by collective or state ownership of all property and means of production, aiming for a classless society. Socialism also involves some level of government control or regulation over resources and production but allows for varying degrees of private ownership. Mercantilism, an earlier economic theory, focused on maximizing exports and minimizing imports to accumulate wealth, which does not primarily concern the ownership of production means but rather the balance of trade.