An economic system where private businesses operate in competition with each other largely free from state control. Prices are determined by supply and demand rather than government regulation.
Imagine a school science fair where students are free to choose their own projects, compete for the best project, and win based on the quality of their work. That's like Free Enterprise.
Capitalism: An economic system characterized by private or corporate ownership of capital goods, investments determined by private decision, and prices, production, and distribution determined mainly by competition in a free market.
Laissez-faire: A policy or attitude of letting things take their own course without interfering; specifically refers to an economic system where transactions between private parties are free from government intervention.
Supply and Demand: The amount of a commodity, product, or service available (supply) and the desire of buyers for it (demand), considered as factors regulating its price.
Study guides for the entire semester
200k practice questions
Glossary of 50k key terms - memorize important vocab
© 2024 Fiveable Inc. All rights reserved.
AP® and SAT® are trademarks registered by the College Board, which is not affiliated with, and does not endorse this website.