What is MARKET ECONOMY? What does MARKET ECONOMY mean? MARKET ECONOMY meaning

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What is MARKET ECONOMY? What does MARKET ECONOMY mean? MARKET ECONOMY meaning.

A market economy is an economy in which decisions regarding investment, production, and distribution are based on market determined supply and demand, and prices of goods and services are determined in a free price system. The major defining characteristic of a market economy is that investment decisions and the allocation of producer goods are mainly made by cooperative negotiation through markets. This is contrasted with a so-called planned economy, where investment and production decisions are embodied in a plan of production established by a state or other body with control over economic resources.

Market economies can range from regulated markets to various forms of state-owned interventionist variants. In reality, market economies and free markets do not exist in "pure" form, since societies and governments all regulate them to varying degrees. Different perspectives exist as to how strong a role the...

Topics:  Society