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Capitalist Economy

Capitalism describes a system of economic organization of land, labor, and capital. These factors of production are privately owned and employed in the production and distribution of goods and services. Production (or supply) and consumption (or demand) take place via market mechanisms where prices are determined and what is on offer is sold off and markets are cleared. Unique to the capitalist economic system is its emphasis on market functioning as a principal mechanism for allocating resources, which is subject to evolving trends. For instance, advancements in information technology have increased the value of knowledge in production processes. These trends have altered the relative importance of the traditional factors of production (e.g., land, labor, and capital), increasing the importance of human capital and, consequently, of ...

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