Characteristics of a Free Market Economy.
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The government does not direct any factors of production or own any factors of production.
no government involvement
This system encourages people to do what is best for them.
self interest
People will have the motivation to work harder and get more wealth.
incentives
Firms will fight with each other to win customers.
competition
Individuals are free to set up in business for themselves.
freedom of choice
All goods and services that are wanted will be allocated through a price system.
price system
Individuals have the right to own, control and use the factors of production.
private property