Investor Glossary-market economyInvestor Glossary-market economyInvestor Glossary-market economyInvestor Glossary-market economyInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Market Economy

The HTML to link to this page
 

In political economics, a market economy is an economy where market forces set prices. The market economy is distinct from the planned economy, where central government authorities make numerous economic decisions. Capitalism is regarded as a market economy, whereas Communism is considered a planned economy. Most people find the market failures an unrestricted market economy can generate unacceptable. For instance, many people believe a minimum wage is necessary to eliminate utter poverty among the least skilled workers in a pure market economy. Consequently, no economy is strictly a pure market economy, although the laissez faire political viewpoint asserts that the perfectly free market economy would be optimal. Price fixing, restrictions on monopoly, even bans against illegal substances, are in theory all distortions that disrupt the functioning of the market economy by limiting individual choice.



Rate this market economy definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: labor relations, 1031 exchange, wholly-owned subsidiary, margin rate, debt service coverage, phantom income, risk management, ex-dividend date, retained earnings, reverse mortgage, minority interest, required rate of return, FICO score, quality assurance, diluted share, open position, inflation, covered put, stock split, in escrow, cancelled check, real GDP, dividends payable, APR, liquidity ratio, FTSE, balance sheet, 1035 exchange, EBITDA, irrevocable trust, Key Rate Duration, ex-dividend, deferred tax, VIX, option premium, average price per share, implied volatility, current ratio, limit order, deferred revenue, per diem, Zero Cost Collar, annual return, 401a, stock market close, command economy, LIBOR, 144a, class C shares


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2015 Investor Glossary - All rights reserved - Terms of Use