U.S. Citizenship Civics TestPrinciples of American DemocracyMedium
An applicant for naturalization is asked about the economic system of the United States. Which term accurately describes the U.S. economic system?
- ACapitalism (market economy)
- BCommunism
- CFeudalism
- DSocialism
Show answer & explanationAnswer & explanation
Correct answer: A. Capitalism (market economy)
The United States operates under a capitalist system, often referred to as a market economy, where private individuals and businesses own most of the means of production and distribution, and prices are determined by supply and demand.
Why the other options are wrong
- B. Communism involves government ownership of all means of production, which is not the U.S. system.
- C. Feudalism was a medieval economic system based on land tenure and loyalty, unrelated to the modern U.S.
- D. Socialism involves significant government control over key industries, distinct from the U.S. model.
Capitalism (Market Economy)
An economic system in which private individuals or corporations own capital goods, and prices and production are determined by supply and demand.
- Private ownership of resources
- Competition drives innovation
- Limited government intervention (though not entirely absent)
Memory trick: Capital Creates Commerce, Choice, and Competition.