Future Business Leaders of America (FBLA) Agribusiness Practice Test

Which economic system allows individuals to organize and conduct business with limited government control?

1. Capitalism

2. Socialism

3. Communism

4. Free enterprise

The correct answer is: Free enterprise

The economic system that allows individuals to organize and conduct business with limited government control is referred to as free enterprise. This concept emphasizes the role of individual choice and voluntary exchange in economic activities, allowing businesses to operate with minimal intervention from the government. In a free enterprise system, private individuals or businesses own and operate the means of production and distribution of goods and services. This leads to a competitive marketplace where prices are driven by supply and demand, ultimately benefiting consumers with greater choices and potentially lower prices. While capitalism is closely related to free enterprise and often used interchangeably, it refers more broadly to an economic system where private property is valued and capital is accumulated, which can include various degrees of government involvement. Socialism and communism, on the other hand, advocate for significant government control over resources and economic planning. In these systems, the government usually owns the means of production, which contrasts sharply with the limited control found in a free enterprise system. Therefore, the answer points directly to free enterprise as the system that supports individual business initiative under minimal government control, promoting economic freedom and entrepreneurship.