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: -Market economies are tied to capitalism, an economic system where private entities or people own the means of production. Capitalism needs the forces of supply and demand in the market economy to distribute goods and services and set prices.

Detailed explanation-3: -Each economy functions based on a unique set of conditions and assumptions. Economic systems can be categorized into four main types: traditional economies, command economies, mixed economies, and market economies.

Detailed explanation-4: -Capitalist economy is the suitable other name for market economy because in the capitalist kind of economics, the price is determined by the market forces i.e. by the market forces of demand and supply and no government intervention exists.