Category: American Government
The economic system of the United States is capitalism (also called a free market economy or market economy). In this system, private businesses and consumers — not the government — drive most economic decisions.
In a capitalist economy, individuals can own property, start businesses, set prices, and compete freely. The government plays a role (regulations, taxes, public services) but doesn't control the economy the way a socialist or communist system would.
This question appears on both the 2008 and 2025 tests, and it's on the 65/20 senior list — so it's one of the most commonly asked questions at interviews.
Say: 'Capitalism' or 'a market economy.' Either is accepted.
Test yourself with our free quiz simulator and interactive flashcards — the same official questions, timed like the real interview.