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: -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. A competitive market economy promotes the efficient use of its resources.

Detailed explanation-3: -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-4: -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-5: -Under the command economy, the government exercises the most control for the factors of production such as capital, labor, entrepreneurship and land.