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Which of the following is NOT a characteristic of a capitalist or free-market economy?
ARight to private property held by individuals
BAllocation of resources by a central planning authority
CFreedom of enterprise for producers and consumers
DConsumer sovereignty guiding what is produced
Answer & Solution
Correct answer: B. Allocation of resources by a central planning authority
1. Capitalism relies on the price mechanism, not a central authority, to allocate resources.
2. Private property, freedom of enterprise and consumer sovereignty are genuine capitalist features.
3. Central planning is a feature of socialism, so it is the odd one out.
4. Hence the statement that does NOT belong is allocation by a central planning authority.
_Source: ICAI BoS CA Foundation Paper 4 Business Economics, Ch 1 Unit II "Basic Problems of an Economy and Role of Price Mechanism", p.2_
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