A free enterprise economic system is an economic system where buyers and sellers make the economic decisions in a society. A free enterprise economic system is also called market enterprise or it is sometimes referred to as capitalism. All of these terms refer to the same ideas about economic decisions. Although there is government involvement in free enterprise economic systems, the level of involvement differs than that of a communist economic system. The government's involvement in a free enterprise economic system is sometimes referred to as The Invisible Hand.

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The Invisible Hand refers to the natural forces such as competition, profit motive, and scarcity that guide the free enterprise economy decisions. The government regulations invisibly guide the economy, but consumers make the actual decisions.

Free enterprise economic systems are usually found in countries such as Canada and the United States.

Source: Flag of Canada, Central Intelligence Agency

Source: Flag of United States, Central Intelligence Agency

Scroll over the following symbols to see how each plays a role in a market economy:

Your mission, Super Student Agent, is to recognize the characteristics of a free enterprise economic system, based on what you have learned so far. Look at the terms below and see if they apply to a free enterprise economic system, click on the ones that you think are correct.