Final answer:
A free market economy is an economic system where resources are allocated based on the interactions of buyers and sellers, with minimal government intervention. Prices are determined by supply and demand, and competition drives efficiency and innovation. It promotes individual freedom and encourages entrepreneurship.
Step-by-step explanation:
Free Market Economy
A free market economy is an economic system where resources are allocated based on the interactions of buyers and sellers. In this system, there is minimal government intervention and individuals have the freedom to own property, produce and sell goods and services, and make economic decisions.
In a free market economy, prices are determined by supply and demand, and competition drives efficiency and innovation. For example, in a free market, if there is high demand for a particular product, its price will increase. This encourages businesses to produce more of that product to meet the demand, leading to economic growth.
Overall, a free market economy promotes individual freedom and encourages entrepreneurship, while also allowing for the efficient allocation of resources based on market forces.
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