market economy
Definition
Free market system in which decisions regarding resource allocation, production, and consumption, and price levels and competition, are made by the collective actions of individuals or organizations seeking their own advantage. In all market economies, however, freedom of the markets is limited and governments intervene occasionally to encourage or dampen demand or to promote competition to thwart the emergence of monopolies. Also called free economy, free market, or free market economy. See also open economy.
Use market economy in a sentence
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Opposite of a centrally planned economy, a market economy allows a country's citizens and businesses to make economic decisions regarding pricing and supply and demand.
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