Please enable JavaScript.
Coggle requires JavaScript to display documents.
1.6., FREE MARKET, MIXED MARKET, COMMAND ECONOMY, 1200px-Karl_Marx_001,…
1.6.
FREE MARKET ECONOMY
The market forces are allowed to guide the allocation of resources.
Less than 40% of GDP is produced by government.
-
-
-
-
-
Karl Marx was in favour of command economies as he believed that the Proletariat would eventually rebel against the Bourgeoise.
Keynes believed that intervention was still needed even in a mixed economy. Eg he suggested that the government should intervene in the Great Depression.
Smith and Hayek believed that free market economies were best as the invisible hand and the market forces would lead to efficient allocation of resources.
-
-
-
Inequality- Wealthy will tend to be able to accumulate greater wealth.
-Unstable because of the tension because the proletariat feel exploited in this system.
-Monopolies with high market share can dictate consumer prices.
-
Government produces 40-60% of GDP (France and Germany)
Most businesses are private but there is government regulation and intervention.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
