Civics question 12 of 128 65/20 set

What is the economic system of the United States?

Source: official USCIS question list for the 2025 version of the civics test. This site is independent and not affiliated with USCIS.

Background

The economic system of the United States is capitalism, which the test also accepts as a free market economy. Both terms describe a system where individuals and businesses, rather than the government, own property and decide what to produce, and where prices are set largely by supply and demand. In practice the American economy is mixed rather than purely free: government sets rules for safety, competition, banking, and labor, and runs large programs such as Social Security and Medicare. Where that line should sit is a matter of ongoing political debate rather than a settled definition, but for the civics test either single term is the expected answer. The contrast the question has in mind is a command economy, where a central authority decides production and prices.

This background section is written by US Citizenship Test Practice to explain the civics fact. It is not part of the USCIS question list, and the official answer above is the one to give at the interview.

Where this question sits

It is part of Principles of American Government, inside the American Government section of the test. It is also one of the 20 questions in the 65/20 set, so it is worth knowing well.

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