Economics Concepts and Definitions
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A Free Market Economy
A free market economy is a rationing system by which societies allocate resources to the production of goods and services using the price mechanism, with no government intervention. All economic decisions are based on the market forces of demand and supply. (Adam Smith)
A Command Economy
A command economy, also called centrally planned economy, is a rationing system where the means of production are owned by the state. There is no private property and all economic decisions are made by the government. (Karl Marx)
Positive Economics
Positive economics are statements based on facts or evidence; free from subjectivity. They can be tested scientifically and proved.
Normative Economics
Normative economics are economic statements based... Continue reading "Economics Concepts and Definitions" »