NABTEB Economics 2022 Objective — Question 4

Question 4 of 50 from the National Business and Technical Examinations Board (NABTEB) Economics 2022 Objective paper, with the correct answer and a full explanation.

A major disadvantage of a capitalist economy is that it

A. leads to low production of goods and services
B. requires large number of officials to operate
C. considers individual consumers' satisfaction
D. worsens income inequality among the citizensCorrect

Explanation

In a capitalist economy, dominated by private individuals with minimal government participation, income inequality among citizens tends to worsen, contrary to the equitable distribution promoted by socialist economies.

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