A __ is an economy that is driven by a fairly small group of rich people. Select one: a. democracy b. monarchy c. plutonomy d. homogany Clear my choice
The Correct Answer and Explanation is:
The correct answer is c. plutonomy.
Explanation:
A plutonomy is an economic system where wealth and economic power are concentrated in the hands of a small, affluent group of individuals. In such a system, a significant portion of the economy’s wealth and resources is controlled by a wealthy elite, leaving the majority of the population with limited financial influence. The term comes from the combination of “pluto-” (meaning wealth or riches) and “nomy” (meaning law or management of).
In a plutonomy, the richest individuals and corporations hold most of the economic power. This often leads to an imbalance in wealth distribution, with a shrinking middle class and an expanding gap between the wealthy elite and the rest of the population. The economy’s performance is heavily influenced by the consumption habits and financial activities of this small, wealthy class, rather than the broader population.
To further clarify, here’s a comparison with the other options:
- Democracy: This is a form of government where political power is vested in the people, either directly or through elected representatives. In a democracy, the principle of equality is central, and wealth concentration is not the defining feature.
- Monarchy: A monarchy is a form of governance where power resides with a single ruler, typically a king or queen, who holds authority either through hereditary succession or divine right. While a monarchy may have an elite ruling class, it is not specifically an economic term related to wealth concentration.
- Homogany: This term does not exist in the context of economics. It might have been a typo or misunderstanding.
Therefore, a plutonomy is the correct term when describing an economy dominated by a small, wealthy group.
