The advantages of free market economic system: 1. Every individual is free and has a wealth of production resources. 2. The initiative and creativity of the community in economic activity can be developed. 3.
The reverse opinion of that of a free market. Overall a free market is very different to a planned economy in both the production through to consumption. However the argument of which was in more effective or fairer is up to interpretation. However every economy needs a certain level of control, thus why nowhere in the world has a completely free
However, a number of limitations and undesirable outcomes associated with the market system result in an active, but limited economic role for government. Advantages: - Goods and services go where they are most in demand and free market responds quickly to people’s wants + wide variety of G&S - No
A free market economy will be most beneficial for the following reasons; limited government, freedom of choice, and the increased quality of production. The goods and services produced will be the ones most needed, this will depend on the popularity and demand for these products. Overall this will help producers focus on providing certain goods and services thus eliminating ones that are unnecessary and using valuable resources. A free market economy means limited government involvement and the freedom of choice. This allows producers to study the demand and decide what will sell and generate the most income instead of waiting for the government to tell them what to make.
Some people fear that free trade will lead to inequality in some states with a history of ineffective governance. Small family business cannot compete on the global scale, so free trade is not beneficial to local businesses when it comes to profit. With reduced tariffs imposed on imported goods, foreign suppliers can easily lower their costs. And as a result, consumers will prefer imported goods and products over locally produced commodities. Free trade will lead some countries to disregard the environment when it comes to producing products and getting rid of waste materials just so they can compete in the
Free markets, the protection of private property, and a government presence in the economy lead to prosperity. In fact, as said in Foundation for Economic Education, “Adam Smith made the case that prosperity is produced through a competitive market economy”. This validates the point that if a free market environment was formed and sustained, the overall economy would grow and flourish. Adam Smith had acknowledged that the invisible hand in a market, if placed in an atmosphere of economic freedom, would successfully allocate resources. This type of economy will appeal all types of investments.
Having Globalization supports free and better trade all over the globe. However, Globalization can have a negative effect on the world. Employment can decline in a globalized world, It can hurt nations economy, and If country’s cant function together it can create global strife. Globalization is a positive force for the world because it promotes free trade. In a globalized world, free trade is one of the main factors that contribute to globalization.
If prices are sufficiently flexible, the pressure of excess supply or excess demand will quickly bid process in a free market to their equilibrium level. Attributes of a free market The free market systems aims at achieving efficiency, growth and freedom of variety and benefits of increased innovation that’s brought by
One benefit that a free market offers to society is economic efficiency. Since, a free market is self-regulating, producers are entirely free to make their own choices on what services or products to purchase. Of course, due to supply and demand the most desired products by consumers will be produced because they are willing to pay at prices they want. Moreover, in a free market there is the most economic freedom compared to a communist system. For example, in a free market economy workers have the independence to work at whatever firm/business they want.
Besides that, there are always problems with market economy system. There are some disadvantages such as the exploitation of workers and uncomfortable working condition, investment priorities and wealth becomes distorted, goods cost will be lower due to the mass produced, prices may give false or inadequate signals to producers and consumers, high levels of unemployment due to the overproduction of goods, and produce a skewed distribution of income through large gap between the rich and the poor. Free competition is the spirit of market economy system, naturally led the group with income and wealth in order to compete with any particular group. The market economy instead of making competitive but it leads to monopoly. In this paper, the writer would like to address the reasons of market economy is a poor choice for developing country to stay