economy stems from the amount of money (raised in the form of taxes and borrowings from the private sector) that it spends and, through various forms of welfare, redistributes. Today, the economies of most industrial countries are considered mixed economies. In Western European nations the government usually plays a larger role in the economy than in North America. Since the fall of the Soviet Union in 1991, the only two major planned economies are those of North Korea and the People's Republic of China. However, China has begun to incorporate some market mechanisms, such as competition, into its economy. Although many people characterize the U.S. economy as a “free market economy,” it is clearly a mixed economy. The federal government alone accounts for about 19 percent of the U.S. economy (depending on what forms of government spending are counted). Adding state and local governments brings the public sector share up to about 28 percent. With that kind of economic clout, government at various levels has a lot to say about what is produced in our society and who gets what. Nevertheless, the United States relies on markets to a larger
degree than any other major industrial nation in the world, so from a relative standpoint, it is indeed a free market economy.
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