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Market Economy |
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Market economy is one of the types of the economy. It is a type of system in which the distribution and production takes place through price mechanism. In this type of economy consumers have the right to choose from whom to buy. Market economy is also called free market economy. In this type of economy the producer decide how much to produce and in what quantity. They also have the right to decide as how much to charge the customers for goods. Economy is going through a sea change every year and so are the elements of the economy. In the past two centuries the definition of the types of economy has changed. With the coming of industrial revolution many changes were witnessed in the economy of the world.
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Market economy has become an integral part of the economy. The decisions that are taken in free market economy are mainly influenced by pressures of supply, demand and competition. No market can exist without market economy. This type of economy helps in generating wealth and also offer job opportunities. The one best thing about this economy is that there is little intervention by government. Many of the developed countries in the world has market economy. For example USA also has a market economy system. Market economy in USA is viewed as one of the most effective economies of the world. USA has the lowest inflation rate.
One of the important features of a market economy is the freedom of businesses and individuals to make the best choice between goods and services. The forces of market decide whom to produce and what to produce. As the US market economy features all the important elements of market economy, the country also has low unemployment rate.
As the forces of market keep on fluctuating the market economy of the country also change accordingly. In today's global market the market economy has become a choice. In many countries the market economy is also called free market economy.
Milton Friedman and Friedrich von Hayek have expressed that in an economic freedom is necessary in for the development of the country. They also stated that this economic freedom can only be attained in a market economy. The wealth generated in this type of economy is used for the benefit of all. The use of free market economy is different in different countries. But one thing is clear that to make the country's economy develop and grow fast market economy is necessary. |
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