ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Competition is another important characteristic of a market economy. Instead of government regulation, competition limits abuse of economic power by one business or individual against another. Each competitor tries to further his own self-interest.

Detailed explanation-2: -Private property, freedom, self-interest, competition, minimum government intervention are the characteristics of a market economy.

Detailed explanation-3: -Healthy market competition is fundamental to a well-functioning U.S. economy. Basic economic theory demonstrates that when firms have to compete for customers, it leads to lower prices, higher quality goods and services, greater variety, and more innovation.

Detailed explanation-4: -The characteristics of a market system are: 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-5: -The credit market brings together the suppliers of credit (households) with those who are demanding credit (other households, firms, and the government). The labor market is where labor services are traded. The foreign exchange market brings together demanders and suppliers of foreign currency.