Free Market

A market economy based on supply and demand with little or no government control. A completely free market is an idealized form of a market economy where buyers and sellers are allowed to transact freely (i.e. buy/sell/trade) based on a mutual agreement on price without state intervention in the form of taxes, subsidies or regulation.

In financial markets, free market stocks are securities that are widely traded and whose prices are not affected by availability.

In foreign-exchange markets, it is a market where exchange rates are not pegged (by government) and thus rise and fall freely though supply and demand for currency.

In simple terms, a free market is a summary term for an array of exchanges that take place in society. Each exchange is a voluntary agreement between two parties who trade in the form of goods and services. In reality, this is the extent to which a free market exists since there will always be government intervention in the form of taxes, price controls and restrictions that prevent new competitors from entering a market. Just like supply-side economics, free market is a term used to describe a political or ideological viewpoint on policy and is not a field within economics.


Investment dictionary. . 2012.

Look at other dictionaries:

  • free-market — free market …   Dictionary of sociology

  • free-market — freeˈ market adjective • • • Main Entry: ↑free * * * free market adj, always used before a noun a free market economy free market principles • • • Main Entry: ↑free market …   Useful english dictionary

  • free market — free markets N COUNT: usu sing A free market is an economic system in which business organizations decide things such as prices and wages, and are not controlled by the government. ...the creation of a free market. ...free market economies …   English dictionary

  • free market — n. any market where buying and selling can be carried on without restrictions as to price, etc.: often used figuratively [the free market of ideas] * * * …   Universalium

  • free market — n. any market where buying and selling can be carried on without restrictions as to price, etc.: often used figuratively [the free market of ideas] …   English World dictionary

  • free market — n an economic system in which prices are not controlled by the government ▪ a free market economy …   Dictionary of contemporary English

  • free market — noun count an economic system in which things such as prices and pay are set as a result of competition between different businesses and are not controlled by a government …   Usage of the words and phrases in modern English

  • free market — ► NOUN ▪ an economic system in which prices are determined by unrestricted competition between privately owned businesses …   English terms dictionary

  • Free market — A free market is a market in which property rights are voluntarily exchanged at a price arranged completely by the mutual consent of sellers and buyers. In a free market, individuals, rather than government, make the majority of decisions… …   Wikipedia

  • free market — noun : an economic market operating by free competition : an economic condition of unrestricted buying and selling * * * noun, pl ⋯ kets [count] : an economic market or system in which prices are based on competition among private businesses and… …   Useful english dictionary

  • free market — A market place where individuals can act in their own best interest, free from outside forces (freedom means freedom from government) restricting their choices, or regulating or subsidizing product prices. Free market also refers to the political …   Financial and business terms

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