ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -The activity in a market economy is unplanned. It is not organized by any central authority but is instead determined by the supply and demand of goods and services. The United States, England, and Japan are all examples of market economies.

Detailed explanation-3: -Brief explanations are given for these characteristics of the market system: private property, freedom of enterprise and choice, the role of self-interest, competition, markets and prices, the reliance on technology and capital goods, specialization, use of money, and the active, but limited role of government.

Detailed explanation-4: -A market economy is an economic system in which individuals, rather than the state, own most of the resources. This includes land, labor, and capital. In a market economy, individuals control the use and price of these resources through voluntary decisions made in the marketplace.