Question

What is the Market Economy?

Hint:

In a market economy, businesses and consumers interact freely, and prices fluctuate according to market demand and supply.

Answer 1

Step 1: Understanding the Market Economy.
A market economy is an economic system where the production and distribution of goods and services are determined by the free market, based on supply and demand. In this system, prices are set by the market, and there is minimal government intervention.

Step 2: Conclusion.
Thus, in a market economy, decisions about investment, production, and distribution are driven by market forces.