ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A market economy is an economy based on capitalism, where goods and services are freely exchanged on an open market. The value of the outputs, most often characterized in terms of a price, is determined solely by market interaction between producers and consumers, a concept known as voluntary exchange.

Detailed explanation-2: -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-3: -One of the most important characteristics of a market economy, also called a free enterprise economy, is the role of a limited government. Most economic decisions are made by buyers and sellers, not the government. A competitive market economy promotes the efficient use of its resources.

Detailed explanation-4: -In economics, a free market is an economic system in which the prices of goods and services are determined by supply and demand expressed by sellers and buyers. Such markets, as modeled, operate without the intervention of government or any other external authority.