A market economy is an economy that has no government intervention in the allocation of resources & distribution of goods/services

• This is also called a free market economy

• There is no purely free market economy in the world but some countries have less government intervention than others

  
  
  
  

• An economy can be considered to be a market, mixed or planned economy

  • The type of economy is determined by how the three economic questions are answered (see: 2.2.1 The (Free) Market System).

    
    

  • This ultimately determines the amount of government intervention in an economy 

The spectrum of economic systems & where certain economies fall based on the degree of government intervention

• North Korea is a planned economy

• The United States, Japan & Singapore are mixed economies but have less government intervention than Norway, Germany or China