Merits of Capitalism: (any 3 points) Automatic Working: Without any government intervention, the economy works automatically. Efficient Use of Resources: All resources are put into optimum use. Incentives for Hard work: Hard work is encouraged and entrepreneurs get more profit for more efficiency. Economic Progress: Production and productivity levels are very high in capitalistic economies. Consumers Sovereignty: All production activities are aimed at satisfying the consumers. Higher Rates of Capital Formation: Increase in saving and investment leads to higher rates of capital formation. Development of New Technology: As profit is aimed at, producers invest on new technology and produce quality goods