Question

Give two examples illustrating how the US has socialistic characteristics.

Answer 1

The United States of America is a mixed economy. A mixed economy is an economy with elements of both free market and centrally planned economic control by the government. From long it is debated whether the US is a pure capitalist economy or is it have some elements of socialism in its decision making. Following are some elements of Socialism in the US economy.

1. Necessary registration to start by private business with US government agencies. Professional, such as private investigators, real estate agents, financial advisers, across various domain need government approval to operate.
2. Government policies affect various private business:
   • Private businesses in the food and medicine industry need to follow guidelines established by the Food and Drug Administration(FDA)
   • Companies need to comply with the Federal Trade Commission(FTC) in the advertising field
   • The hiring and firing policy of a company need to be in consonance with the Fair Labor Standards Act (FLSA), the Employee Retirement Income Security Act(ERISA) and many other regulations.
3. Monetary policy action by the Federal Reserve and Fiscal Policy by Congress.

These elements along with unambiguous elements of the free market in the US confirm the US is a mixed economy.

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