ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A free market is one where voluntary exchange and the laws of supply and demand provide the sole basis for the economic system, without government intervention.

Detailed explanation-2: -Voluntary exchange is a type of transaction where two parties freely trade goods or services. This occurs in a market economy, which is a type of economy where both participants of an interaction gain a mutual benefit from it and are better off than when they started.

Detailed explanation-3: -free market, an unregulated system of economic exchange, in which taxes, quality controls, quotas, tariffs, and other forms of centralized economic interventions by government either do not exist or are minimal.

Detailed explanation-4: -A voluntary trade is one in which both parties gain an individual benefit from making the exchange. A person who selects a TV at an electronics store and purchases it is gaining a TV that is more valuable to them than the money they spent on it.

Detailed explanation-5: -At each step of the way, terms of exchanges, or prices, are determined by the voluntary interactions of suppliers and demanders. This market is “free” because choices, at each step, are made freely and voluntarily. The free market and the free price system make goods from around the world available to consumers.