Free Market Economy
An economic system where the government does not interfere
in business activity in any way.
Advantages for a free market economy are gives the choice of freedom to the citizens living in Australia, Hong Kong or the UK, Price is set by the market forces, meaning the business have the choice to set price based on supply and demand and consumers have a choice based on whether they like the price and can afford the price. In a command economy the government would have the choice over the price, Private enterprises can innovate and make a profit. These are the advantages of a free market economy. Disadvantages are that the desire for profit within the individual businesses can mean that certain services are not provided at a reasonable cost or at all in certain areas e.g. health services in remote communities. Consumers and business could have trouble finding some of the resources, Some weak business could fallout making the employees lose their jobs, Market failures would make other companies more powerful than others and lead to instability. These are the disadvantages of a free market economy. This site shows the economic difficulties and description of a free market in the united states http://money.howstuffworks.com/free-market-economy2.htm |