Definition and Characteristics
A market economy is an economy that has no government intervention in the allocation of resources and 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 .
