Which type of economy does the United States primarily operate under?

• A. Market economy
• B. Command economy
• C. Mixed economy with a strong emphasis on central planning
• D. Traditional economy

Answer: (A)

Verified step by step guidance

1. Understand the definitions of different types of economies: a Market economy is one where decisions about production and consumption are driven by supply and demand with minimal government intervention; a Command economy is centrally planned by the government; a Mixed economy combines elements of both market and government control; a Traditional economy relies on customs and historical precedent.
2. Analyze the economic system of the United States by considering the role of private ownership, market forces, and government regulation in its economy.
3. Recognize that the United States has a predominantly private sector where businesses and consumers make most economic decisions based on market signals like prices and competition.
4. Note that while the U.S. government does regulate certain industries and provides public goods, it does not centrally plan the economy, which distinguishes it from a command economy or a mixed economy with strong central planning.
5. Conclude that the U.S. primarily operates under a Market economy because market forces largely determine economic outcomes, with some government intervention to correct market failures and provide regulation.