1.1.6 Glossary Free Market Economies/ Mixed Economy/ Command Economy

Question 1

Free market

Answer 1

A market where voluntary exchange and the laws of supply and demand allocate scarce resolves and determine market prices without government intervention.

Question 2

Laissez faire economics

Answer 2

Assumes that free-market forces on their own, driver by the decisions and choices of rational agents, price every investment correctly.

Question 3

Free trade

Answer 3

Freedom to trade internationally and promote free movement of capital and labour.

Question 4

Market economy

Answer 4

Market determines what goods are produced and what prices are established. The pursuit of self interest (consumer wants and producer profit motives) drives the allocation of resources.

Question 5

Mixed economy

Answer 5

Economic system that combines private enterprise and government involvement.

Question 6

Economic system

Answer 6

A network of organisations used by society to resolve the basic economic problem.