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Question 12 of 128 · American Government · Principles of American Government

What is the economic system of the United States?

On the 65/20 list: one of the 20 questions for applicants 65 or older with 20 years as permanent residents.

Accepted answers

  • Capitalism
  • Free market economy

Any one of these is accepted, unless the question asks for more than one.

Why this is the answer

The United States has a capitalist economy, also called a free market economy. Most businesses are owned by individuals and companies rather than by the government, people are free to start a business and make money, and prices are worked out between businesses and buyers in the marketplace rather than planned by the state. The government sets rules, but it does not run the economy. Either official answer is accepted. Memory hook: capitalism means businesses in private hands; a free market means people are free to buy, sell and start.