Economic system is defined as a set of social institutions that mainly concerns on production, distribution and consumption of goods as well as services in a given country. Furthermore, economic system must have first people and institutions in order to exist. Failure to provide any of those two would mean imbalances in the market. Another definition of economic system would be, it is the one responsible for systematically solving economic problems like limited resources, proper allocation and maximization resources.
Now, as to what type of economy United States is, well, based from the given that economic activity depends primarily on the interaction between private firms and consumers with the presence of seasonal government intervention to regulate such system is enough to say that U.S. is a capitalists type of market system. Under s capitalist economic system, majority of the producers in the market are from the private sector and only minimal participation from the side of the state (Bakunin, 2007). Moreover, in capitalist economy, the main role of the government is to regulate the interaction between the consumers and producers and to keep balance in the economy through either tax imposition to protect the welfare of the consumers against abusing producers especially monopolists, or to provide subsidies to help the private sector to grow in the marker especially those companies that belongs to infant industries. Like for instance, it was stated on the case that the government regulates the prices of electricity being produced by a monopolists. This is a great example of how government intervene into an economy driven by the concept of capitalism. As for the case of the consumers, government sometimes increases the prices of those commodities of unstable industries in order to provide enough room for the said industry to boom, thereby contributing into the economic growth of the entire country. But most of the time, under the capitalist economy system, it is always the private firms that makes negative effects into the market through abusing their market influence and power.
Bakunin, M. (2007). The Capitalist System. Retrieved February 25, 2008, from http://www.spunk.org/texts/writers/bakunin/sp001173.html