What economic system involves investment in businesses to earn profit?

The economic system that involves investment in businesses to earn profit is capitalism. This system is characterized by private ownership of the means of production and the operation of businesses within a competitive market environment. In capitalism, individuals or investors allocate resources, make investments, and own businesses with the primary goal of generating profit.

The profit motive drives innovation and efficiency, as businesses strive to meet consumer demands while minimizing costs. This contrasts with other economic systems like socialism, which emphasizes collective ownership and wealth distribution, often limiting profit incentives. Feudalism is a system based on land ownership and labor obligations, typically lacking direct investment in businesses for profit. Mercantilism, while it does involve trade and some investment, is primarily focused on accumulating wealth through trade surplus and government intervention rather than individual business profit-driven motives.