Economics: Today and Tomorrow © 2012Chapter 2:
Economic Systems and the American EconomyChapter OverviewsSection 1: Economic Systems
The way a nation determines how to use its resources to satisfy its people’s needs and wants is called an economic system. Each type of system is labeled according to how it answers the basic economic questions of WHAT, HOW, and FOR WHOM to produce. The major economic systems in use today are traditional, command, market, and mixed. Section 2: Characteristics of the American Economy
The American economy is based on the market system, which is also called capitalism, a laissez-faire system, or a free-enterprise system. This system has limited government involvement and allows the people to make their own economic decisions. 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 profit incentive, competition, and private property all influence the American economy. Section 3: The Goals of the Nation
A nation's values and goals influence its choice of economic systems. The economic goals of the free enterprise system are freedom, efficiency, equity, security, stability and growth. Individuals have both rights and responsibilities in a free market system. Section 4: Capitalism and Socialism
Contrary to capitalism, socialism is an economic system that allows the state to own all the factors of production, such as big factories. The main benefits of capitalism are economic efficiency and individual freedom.  | 
