Chapter 2: Economic Systems and the American Economy

Chapter 2 explores the major economic systems in use today—traditional, command, market, and mixed. Each type of system is labeled according to how it answers the basic economic questions of WHAT, HOW, and FOR WHOM to produce. The role that government plays in each type of economic system is also examined.

Market Economy
The American economy, a market system, is examined in detail, including its characteristics and goals and the meaning of free enterprise and free choice. The roles of private property, the profit incentive, and competition in the marketplace are also discussed.

National Goals
A nation's values and goals influence its choice of economic systems. The national economic goals of the United States and the advantages of the American free enterprise system are explained. The chapter concludes with a discussion of the economic responsibilities of individuals in a free enterprise system.