Which term best represents a system where market forces drive economic activities?

The term that best represents a system where market forces drive economic activities is capitalism. In a capitalist system, individuals and businesses have the freedom to make choices regarding the production, distribution, and consumption of goods and services. Prices in a capitalist economy are determined by supply and demand, which reflects the preferences and behaviors of consumers and producers.

This market-driven approach fosters competition and innovation, as companies strive to meet consumer needs and preferences, leading to the efficient allocation of resources. In capitalism, the role of the government is typically limited in economic decision-making, allowing the market to operate with minimal intervention.

In contrast, the other options represent different systems where market forces do not primarily dictate economic activities. Socialism emphasizes collective or government ownership of resources and often aims to redistribute wealth to achieve more equitable outcomes. Communism advocates for a classless society where property is owned communally and economic planning replaces market forces. Feudalism is an ancient system characterized by hierarchical relationships and land ownership, where obligations and loyalty defined economic roles rather than market mechanisms. Thus, capitalism is the most fitting term among the options for a system driven by market forces.