Market Research Paper Example | Topics and Well Written Essays - 1250 words

Market - Research Paper Example Other characteristics of free market economy are free trade fairs without subsidies or tariffs from the government. One of the most outstanding free market economies is that the government has very limited powers in a free market economy because marker powers regarding price control are set by buyers and sellers. Since the government lacks direct control of business operations regarding prices, sellers are likely to exhaust buyers through high prices (Chai 24). The government powers are restricted to providing law and order in the market operations and ensuring that only fair competition is charged. The government does not have control over participants’ entry to the market. This means that the government does not stipulate any rules regarding tariffs and subsides. Therefore, it is an economic system whereby only the fittest survive. In such economy, the government does not play any role that may favour or discourage business partners as only the involved parties regulate the transactions and prices. The government is restricted to making possible flow and functioning of the business environment through implementing policies and laws that guarantee people rights and freedoms to property. Therefore, the government is not a competitor or a market player but enhances business operations by creating a suitable business environment (Friedman 19). China is a mixed economy since the government and the private sector have an influence in the economy thus having both characteristics of both free market economies and controlled economy. Majority of mixed economies have strong government regulations as the government provides public goods and government run enterprises. In mixed economies like china, production of goods and services are mainly conducted by the private sector whereby markets are the major controllers and coordinators of economy. The driving forces within mixed markets are profit seeking enterprises and capital accumulation. Unlike pure free market e conomy in china, the government has larger indirect control over the economy by implementing monetary and fiscal policies and regulations. These policies counteract economic challenges and capitalisms’ influence towards financial crisis and challenges towards unemployment. The government has a central place in providing social welfare and making sure that public goods are available to the public (Chai 52). In general, the degree of freedom in a mixed economy against government regulations varies. The government is often responsible for providing environmental protection, maintaining unemployment standards, and controlling competition. China may not fit to be a free market economy since the government has strong control over inflation and rural spending (Friedman 35). China has been successful since its government is vibrant ion deficit funding programs since 1998 as well as endorsement of exports by tax rebates. When public demand is low due to anti-inflation, export promotio ns and monetary policies chip in to create a difference. When public demand is strong, the promotion of external export by government relaxes. Statistics show that the stock market activities are high because households and other enterprises prefer their funds in more liquid forms. Due to inflation surge, the government sets policies and regulations to correct the economic situation. Government policies in