📚 Learning Guide
Exploitation in Capitalism
easy

What is the primary mechanism through which capital accumulation occurs in a capitalist economy?

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Learning Path
Learning Path

Question & Answer
1
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2
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3
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4
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Choose the Best Answer

A

Increased wages for workers

B

Investments in productive assets

C

Government intervention

D

Decreased consumer demand

Understanding the Answer

Let's break down why this is correct

Answer

In a capitalist economy, capital accumulation primarily happens through the process of investment and profit generation. Businesses invest money to produce goods or services, and when they sell these products, they earn profits. This profit is then often reinvested into the business to expand operations or improve production, which leads to more profits over time. For example, a coffee shop might use its earnings to buy better equipment or open a new location, allowing it to make even more money. However, this process can also involve exploitation, as workers may not receive fair wages for their labor, allowing owners to keep a larger share of the profits.

Detailed Explanation

In a capitalist economy, people and companies invest money to buy things that help them make more money. Other options are incorrect because Some might think that paying workers more leads to more capital; Many believe that government actions create capital accumulation.

Key Concepts

Capital accumulation
Topic

Exploitation in Capitalism

Difficulty

easy level question

Cognitive Level

understand

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