McKay 1

Andrea McKay
Dennis Wilson
Econ 2020
3 December 2015
Econ 2020 Paper Government Owning Corporations
This semester I took macroeconomics and learned quite a bit about what kind
of economic system the U.S economy has. An economic system is a particular set of
institutional arrangements and a coordinating mechanism for solving the
economizing problems; a method of organizing an economy, of which the market
system and the command system are the two general types. The economy system
also affects the ownership that the government has over major U.S. corporations.
From everything I learned I can see that are economy is both; the U.S. economy is a
mixed economy.
The three things that make up the U.S. economy are households, business
firms, and the government. Households apply to everyone. Its not a business, its
family owned and it involves individual people. Households sell resources to the
business and then households buy goods and services from the businesses. So if I

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were to go to work then I would provide the business with my resources. I would be
helping the business to prosper. The business would give me money and I would be
able to use the money to buy goods from the business. Its like working at Walmart.
By working at the major empire an employee is providing their service to them.
Once pay day comes, the employee is rewarded. Most likely, the employee will spend
their new owned cash at Walmart. Giving their cash to Walmart they receive their
intended assets. Business firms are commercial establishments. They earn profits
for the business owners by selling goods and services. There are three types of
businesses: a sole proprietorship, a partnership, and a corporation. The government
makes all of the laws and rules for the businesses and the households. They do this
to set a barrier. With all of these things making up the U.S economy there is an
economic system put in place that affects all three. I can see that the U.S. economy
is made up of parts from both the command system and the market system.
The command system is a method of organizing an economy in which
property resources are publicly owned and government uses central economic
planning to direct and coordinate economic activities; command economy and
communism. According to Shmoop.com, In a command economic system or planned
economy, the government controls the economy. The state decides how to use and

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distribute resources. The government regulates prices and wages; it may even
determine what sorts of work individuals do. Socialism is a type of command
economic system. Historically, the government has assumed varying degrees of
control over the economy in socialist countries. In some, only major industries have
been subjected to government management; in others, the government has exercised
far more extensive control over the economy. Basically, the government is the one in
charge and they also control the economy. This also applies to the government
owning their own corporations. According to Boundless.com, A government-owned
corporation is a legal entity created by a government to undertake commercial
activities on behalf of an owner government; their legal status varies from being a
part of government to being a private enterprise in which the government holds a
majority of stock. With this system the government owns most of the businesses.
The government decides everything for the businesses; it decides its production
goals and the amount of recourses to be allocated to each business so it can reach its
production goals. With this system the business does not have the authority to make
its own decisions. Decisions like: how to profit the business, how to make it grow,
and how to become a major empire in the business world. From what I learned I can
see that this system alone isnt a good idea for the economy. If government is in full

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control it seems like everything will be equal. No business will be able to progress
over others; it will lack competition. A government controlled economy is against the
constitution. The government cant have full control.
A market system is Characterized by the private ownership of resources and
the use of markets and prices to coordinate and direct economic activity. (Flynn). In
the market system the government is not in charge, its the business that is in
command. Businesses get to decide for themselves. The business has the right and
the opportunity to determine its own future. With this system there is competition
because the government is there to make sure that the resources are allocated
evenly to each business. All of the businesses compete with each other to be on top.
An example of this is gas stations. Sometime in your life youll see two gas stations
across the street from another; each is competing. One station will strive to lower its
price from the other. This is a great example for two businesses competing against
each other. When a competition is present it challenges the business to work at its
hardest. This system encourages businesses to progress and to become more
efficient. It helps them to produce more, to have good numbers to show for. With
good numbers they attract shareholders. Shareholders support will definite help the
company to succeed.

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From what I learned, our economy needs both systems. It needs both
government and non-government. The U.S economy absolutely needs some
government control. Without government control over the U.S. corporations there
could be an imbalance. The government has benefits. It helps to control the
corporations so things can be fair. Some people may disagree with this, but its true.
They help control certain rights. Business owners also deserve and need the right to
make their own decisions. People are capable of many things and this is why they
should have a right, especially if they are the owner of the business. With these
systems combined together we get a mixed economy. I believe that a mixed economy
is the best of all.

Works Cited
Boundless. "Government Corporations." Boundless.com. N.p., 26 Feb. 2009. Web. 3
Dec. 2015.
"Types of Economic Systems." Shmoop. Shmoop University, 15 May 2015.
Web. 3 Dec. 2015.

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Flynn. Brue. McConnell. Microeconomics McGraw-Hill Irwin 2014 book. 3 Dec.
2015.