ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A market economy is an economic system in which economic decisions and the pricing of goods and services are guided by the interactions of a country’s individual citizens and businesses.

Detailed explanation-2: -The United States has more characteristics of a market economy than a command economy, where a government controls the market. In a market economy, the producer gets to decide what to produce, how much to produce, what to charge customers for those goods, and what to pay employees.

Detailed explanation-3: -In a market system, resources are allocated to their most productive use through prices that are determined in markets. These prices act as a signal for buyers and sellers.

Detailed explanation-4: -In a market economy, resources are owned by private individuals. The goods and services that are produced are not determined by the government. Rather, production is determined by businesses responding to the wants and desires of consumers.

Detailed explanation-5: -A market economy is an economy in which the decisions of households and firms interacting in markets allocate economic resources. The United States, Canada, Western Europe, and Japan all have market economies. Privately owned firms must produce and sell goods and services that consumers want to stay in business.