Historically, no nation has ever had a completely authentic free-market economy. In this sense, it is purely a theoretical concept. However, given contemporary usage by economists and other specialists, such as those at the Heritage Foundation, Canada, Hong Kong, Singapore, Australia, New Zealand and Switzerland are thought to rank among "Free" economies, as of 2014. The United States, along with many remaining Western nations, is considered to be "Mostly Free."Know More
In traditional theory, a pure free-market economy is one where no outside intervention affects its functioning, either by the state or any other entity. In reality, such an ideal situation has never materialized. Thus, contemporary researchers use the term to refer to nations where such intervention is optimally limited, where private property is most highly valued and where impediments to trade and investment are to the greatest extent quantifiably non-existent.
Research entities, such as the Heritage Foundation (in league with the Wall Street Journal), assign ratings to different nations after evaluating their strengths and weaknesses in related categories. In a 2014 Index offered by the aforementioned entity, the United States earned a 75.5 out of 100, as opposed to Canada's 80.2. Hong Kong, the highest scorer, earned a 90.1, whereas Great Britain received 74.9. France, with its comparatively higher frequency of government programs and controls, only earned a 63.5, thus categorizing it only as "moderately free." Other nations considered under Mostly Free status include but are not limited to Chile, Ireland, the Netherlands, Germany, Botswana, Qatar, Macau, Saint Lucia and Columbia. Alternatively, the lowest scoring countries are deemed "Repressed" and include North Korea, Burma, Equador and Chad, among others.Learn more about Economics
A market economy is driven by supply and demand. Producers sell goods for the highest prices possible, and members of the labor force work for the highest wages they can earn. Determinations as to how goods and services are allocated are made primarily by markets.Full Answer >
An example of the way a market economy works is how new technology is priced very high when it is first available for purchase, but the price goes down when more of that technology becomes available. This kind of price fluctuation is a central component of a market economy. That is, supply and demand dictates prices.Full Answer >
In a market economy, resources are distributed based on the profitable interactions between producers and consumers. These interactions obey the fundamental law in economics, which is the law of supply and demand.Full Answer >
It is the people who make decisions in a modern-day market economy. This is the case because decisions about production, investment and distribution are based on the rules of supply and demand. The prices of goods and services are then determined in a free price system.Full Answer >