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Preferred term

market economy  

Definition

  • In the 1940s and 1950s, two types of economy were frequently contrasted: the market economy (sometimes also called the “free market” economy) and the centrally planned economy such as that of the former Soviet Union. Whereas in the latter, prices and production decisions were set by administrative decision, in the former, they emerged as a result of the interactions of myriad firms and individuals who negotiate, buy, sell, and set prices for goods and services. [Source: International Encyclopedia of Political Science; Market Economy]

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https://concepts.sagepub.com/social-science/concept/market_economy

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