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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | 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