Which of the following is NOT a characteristic of the American Free Enterprise System?

Which of the following is NOT a characteristic of the American Free Enterprise System?

• A. Entrepreneurship and innovation
• B. Voluntary exchange
• C. Government ownership of all businesses
• D. Private property rights

Answer: (C)

The American Free Enterprise System is fundamentally based on principles that encourage individual initiative, market competition, and minimal government interference. One of its core characteristics is that individuals and businesses are free to own and operate private enterprises. This system thrives on entrepreneurship and innovation, which drive economic growth and provide a diverse range of products and services for consumers.

Voluntary exchange is another key characteristic, where consumers and producers freely engage in transactions based on mutual agreement and benefit. Additionally, private property rights assure individuals the ability to own, control, and use their property, which further incentivizes investment and economic development.

In contrast, the characteristic of government ownership of all businesses fundamentally contradicts the essence of the American Free Enterprise System. If the government were to own all businesses, it would eliminate competition and stifle entrepreneurial spirit, leading to a less dynamic and innovative economy. Thus, choosing the option that refers to government ownership accurately identifies something that is not a characteristic of the American Free Enterprise System.