market economy

noun

Definition of market economy

: an economy in which most goods and services are produced and distributed through free markets

Examples of market economy in a Sentence

Recent Examples on the Web

Since the days of the Nixon administration nearly 50 years ago, American policy has aimed to steer China out of its isolation to prosper in the global market economy. — Eduardo Porter, New York Times, "Trump’s China Policy Has a Flaw: It Makes China the Winner," 27 Mar. 2018 For 50 years Hong Kong could keep its independent courts, its free-market economy and its freewheeling press, while Beijing was responsible for matters of state like national defense and foreign relations. — Austin Ramzy, New York Times, "Hong Kong Gives Mainland Police Sway in New Train Station," 15 June 2018 Capitalism and the market economy create inequality. — Yoshiaki Nohara, Bloomberg.com, "In One of the World’s Richest Countries, Most Single Mothers Live in Poverty," 24 June 2018 Few in Europe and Asia have forgotten that free-market economies were democracy’s greatest weapon in the 20th century, and the entrepreneurs and investors that drive those free markets won’t soon embrace authoritarian control. — James Stavridis, Time, "Democracy Isn't Perfect, But It Will Still Prevail," 12 July 2018 More capital has been coming to the U.S. in the sense that emerging-market economies—people around the world who are wealthier are looking for safe places to invest. — Nick Timiraos, WSJ, "Transcript: WSJ Interview With Chicago Fed President Charles Evans," 11 July 2018 Yet China is not a market economy and, on its present course, never will be. — The Economist, "GeopoliticsHow the West got China wrong," 1 Mar. 2018 In December 2016, China filed an explosive dispute insisting that the European Union and the United States recognize that China has now become a market economy. — Karen J. Alter, Washington Post, "Trump’s tariffs aren’t the biggest trade problem. Will China step up to protect the WTO?," 18 June 2018 Only when the Soviet Union collapsed in 1991 and China’s Communists embraced a market economy did much of the world decide that the Marxist maxims on violence should go on the ash heap of history. — The Christian Science Monitor, "Using Marx’s birthday to recall progress toward peace," 4 May 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'market economy.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

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market capitalization

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Last Updated

17 Oct 2018

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The first known use of market economy was in 1929

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More Definitions for market economy

market economy

noun

Financial Definition of market economy

What It Is

A market economy is structured to allow market forces to determine prices with little or no government involvement.

How It Works

In theory, a market economy's functions are based on fluctuations in supply and demand for specific goods and services across an entire market. This relationship results in market prices that efficiently distribute goods and services among market participants who are willing and able to pay for them. Regulations by government are theoretically unnecessary, since market forces shift supply and demand and signal price adjustments conducive for efficient exchange of goods and services. Capitalism in its purest form exists in a market economy.

Why It Matters

Most developed industrial economies are a hybrid of market economies and government oversight. Fiscal and economic policies are implemented to protect the less fortunate and sustain overall well-being, include minimum wage laws, social insurance programs and subsidized health care.

Source: Investing Answers

market economy

noun