Concept of market economy



The economy led by market is called market economy. In this economy, all economic activities are performed by private sectors. The government doesn’t interfere in the activities of people and business organizations. There is personal freedom to the people and business organization. The government just facilitates the private sectors by providing security, maintaining peace and justice, establishing good diplomatic relationships with other countries and so on. That’s why government is called facilitator rather than doer. It does not make the investment. The investment is made only by private sector. Production, utilization of resources, pricing, employment etc are according to market demand and supply of goods and services. The demand and supply are called market forces.

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