Question

question 4 of 20
what is the difference between capitalism, or the free enterprise system, and mercantilism?
a. capitalism allows businesses to operate without regulation, while mercantilism is based on strict government control over economies.
b. capitalism strives to eliminate social inequality, while mercantilism allows for huge gaps between the rich and the poor.
c. capitalism slows economic growth by restricting trade, while mercantilism is based on the idea of free international trade.
d. capitalism is based on equal treatment of workers, while mercantilism allows women to earn lower wages than men.

Explanation:

Capitalism is characterized by minimal government intervention and free - market operations. Mercantilism, on the other hand, involves strict government control over economic activities such as trade (e.g., through tariffs, quotas, and monopolies to accumulate national wealth).

• Option B: Capitalism does not strive to eliminate social inequality. In fact, it can often exacerbate it due to factors like unequal access to capital.
• Option C: Capitalism is based on free trade (in its purest form) which is supposed to promote economic growth, while mercantilism restricts trade (e.g., through protectionist policies) to benefit the nation - state.
• Option D: Neither capitalism nor mercantilism is specifically based on equal treatment of workers. In capitalism, worker treatment can vary widely depending on market forces and company policies, and in mercantilism, the focus is more on national economic goals rather than worker equality.

Answer:

A. Capitalism allows businesses to operate without regulation, while mercantilism is based on strict government control over economies.