market economy

A market economy, also widely known as a “free market economy,” is one in which goods are bought and sold and prices are determined by the free market, with a minimum of external government control.

A market economy is the basis of the capitalist system. The opposite of a market economy — i.e, a “non-market” or “planned” economy — is one that is heavily regulated or controlled by the government, most notably in socialist or communist countries. Feelings run high among supporters of both types, as exemplified by the famous American economist Milton Friedman who said that “Underlying most arguments against the free market is a lack of belief in freedom itself.” Ouch.

Definitions of market economy
  1. noun

    an economy that relies chiefly on market forces to allocate goods and resources and to determine prices

    free enterprise, laissez-faire economy, private enterprise
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    non-market economy

    an economy that is not a market economy

    capitalism, capitalist economy

    an economic system based on private ownership of capital
    venture capitalism

    capitalism that invests in innovative enterprises (especially high technology) where the potential profits are large
    type of:

    economic system, economy

    the system of production and distribution and consumption

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