An economic system in which the enterprises that produce and deliver goods and services are privately or publicly owned and operated on a for-profit basis. Capitalism is the cornerstone of the free market system in which competition and supply and demand determine the cost of products and the ultimate success of a business venture. The U.S. economy is a hybrid system, referred to as a mixed economy in that it marries the principles of capitalism with some government limits and ownership of some enterprises. Compare to socialism. See Keynesian Economics; Laissez-Faire.
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effective exchange rate
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