Module 9: Economics

The United States economy blends aspects of a free market economy and a command economy. The government regulates the economy in order to protect property rights, competition in the marketplace, the labor force, and the environment. These regulations also help ensure the products and services in the marketplace are safe for all consumers.

America’s mixed economy encourages free trade, both within the borders of the United States and internationally. The United States plays a major role in the global economy, with established trade partnerships with the nations of Canada, Mexico, China, Japan, and the European Union, among others. American businesses, as well as the businesses of foreign nations, frequently search internationally for potential resources, new markets, and profits. More than 700 international companies operate within the state of Virginia.

In the United States economy, the Federal Reserve serves as the nation’s central bank. By adjusting interest rates and the availability of lendable funds, the Fed controls the amount of money in circulation in society. Taxation is used as a tool to raise revenue to provide public goods and services. Adjustments to tax rates and government spending help provide the funds the nation needs to operate, while maintaining a stable economy.