ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -What Is a Simple Definition of a Free Market Economy? A free market economy is one without government intervention or regulation. In a purely free market, buyers and sellers arrive at prices based only on supply and demand.

Detailed explanation-2: -Economists define a free market as one where products are exchanged by a willing buyer and seller. Purchasing groceries at a given price set by the farm grower is a good example of economic exchange. Paying a worker a monthly salary is another instance where an economic exchange happens.

Detailed explanation-3: -It contributes to economic growth and transparency. It ensures competitive markets. Consumers’ voices are heard in that their decisions determine what products or services are in demand. Supply and demand create competition, which helps ensure that the best goods or services are provided to consumers at a lower price.

Detailed explanation-4: -In a market economy, almost everything is owned by individuals and private businesses-not by the government. Natural and capital resources like equipment and buildings are not government-owned. The goods and services produced in the economy are privately owned.