Q:

What type of economy does the United States have?

A:

Quick Answer

The United States has a capitalist economy. Capitalism is an economic system in which businessmen privately own the means of production, which is referred to as capital. Free market competition dictates prices and production levels. Under the capitalist system, prices and salaries are determined by supply and demand. The government’s role in this system is to protect the rights of financial motivators of the economy.

Know More
What type of economy does the United States have?
Credit: Travel Images/UIG Universal Images Group Getty Images

Full Answer

In capitalism, the most successful business people are the ones who create the greatest amount of profit for the least amount of expense. Competition forces companies to keep prices low in order to attract and keep consumers.

Capitalism began as a result of the industrial revolution of the 18th century. Since the disintegration of the Soviet Union, the growth of Japan and other Asian countries as serious competitors to the U.S. economy and an increase in the level of globalization, capitalism has become the dominant economic system worldwide.

The term "capitalist" was originated by social theorist Karl Marx to describe a system wherein a small group of people control large amounts of money and make the most important economic decisions. Marx believed that a capitalist system concentrates power in the hands of wealthy people, who want mainly to maximize their profits.

Learn More

Related Questions

  • Q:

    What type of economy does Canada have?

    A:

    According to Economy Watch, Canada has a market-oriented economy similar to that of the United States. The Canadian economy differs from that of the United States because Canada focuses more on exporting goods than importing them. CanadaFAQ.ca notes that the primary industries that contribute to the economy are the service sector, agriculture, energy and manufacturing.

    Full Answer >
    Filed Under:
  • Q:

    What type of economy does Spain have?

    A:

    Spain has a mixed capitalist economy, which means both the state and the private sector directs the condition of the economy. In terms of per capita income, Spain has the 12th largest economy in the world.

    Full Answer >
    Filed Under:
  • Q:

    What type of economy does Poland have?

    A:

    The country of Poland uses a 'market' economic system and represents the sixth-largest economy in Europe. Countries are generally categorized into one of four economic systems: traditional, command, market or mixed.

    Full Answer >
    Filed Under:
  • Q:

    What type of economy does Afghanistan have?

    A:

    Afghanistan has a primitive type of economy dependent on agriculture, the illegal opium trade and foreign aid. Though its abundance of natural resources such as natural gas, petroleum and many types of minerals has the potential to make it a wealthy nation, due to decades of war, little infrastructure exists with which to exploit this abundance.

    Full Answer >
    Filed Under:

Explore