Advantage And Disadvantages Of The Free Market Economy

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It is when the distribution of resources is determined by the supply and demand. There is no governmental interference in the free market economy. There are several advantages of the free market economy. One of them is promotes to political and civil freedom, and to economic freedom. And also it ensures the competitive markets. Another thing is that consumers always have choice to choose product. The next thing is that supply and demand creates competition. This brings to provide consumers with high quality products at lower prices. But there also disadvantages: Firstly, wealth is not distributed equally. Little percentage of the society has wealth, while the majority is suffering. Another thing is economic instability. Every corporation wants…show more content…
It includes a diversity of private freedom, combined with centralized economic planning and government regulation . South Korea is demonstrating incredible growth. Back in 1960s, GDP per capita was so low that Korea was in the list of the poor countries. But through time it started to increase. In 2004, South Korea joined the trillion-dollar club of world economies, and is currently the world's 12th largest economy. Primarily, a system of close government and business ties, including directed credit and import restrictions, made this success possible. In 1997-1998 there was an Asian financial crisis which exposed longstanding weaknesses in South Korea's development model. In 1998 GDP was by 6.6%, and later in end of 1999 and beginning of 2000 it recovered by 9%. Because of the crises the state adopted some economic reforms. It focused more in foreign investment and import. In 2008 there was global economic downturn which influenced South Korea’s economy negatively. But it was recovered in very short term and in 2010 the growth reached 6.5%.
Republic of Korea and the United States of America signed the United States-Korea Free Trade Agreement in 2007.It was approved by both governments on 2011, and went into force on March 15, 2012. In three years form 2012 the economy experienced slow growth because of market slowdowns in the United States, China, and the
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There the government directs the economy taking into attention the production and distribution of goods. North Korea’s economy is very poor and gloomy because of being self-reliant and closed. This becomes the reason that North Korea is depended on other countries, an order to survive. China and South Korean investments and trade with the North Korea are helping the country to secure needed imports of energy, food, and machinery for factories. In the 1990s, the ineffectiveness of North Korea’s economy system pushed the economy into crisis. The main reason was promotion of state-owned heavy industries, and high military spending. Besides this, Russia stopped its aid, because of the collapse of Soviet Union. This meant to the North Korea loosing amount of GDP $3.58 billion in 1999. Cause of this the leader of the state decreased the military spending and focused in agriculture. Since 2002, the government has allowed private "farmer’s markets" to begin selling a wider range of goods. Also it permitted some private farming an order to force agricultural output. And by 2005 it recovered to only $230 million . So, North Korea somehow experienced the shortage of food and totally the crises. But till nowadays the economy of the state is not good. And the state is suffering of technological obsolescence, uncompetitive exports, economic privation, and lack of foreign

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