In free markets, we tend to think of government regulation as bad: markets can regulate themselves and government regulation is ineffective and interferes with free market movements. 1) Does...

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In free markets, we tend to think of government regulation as bad: markets can regulate themselves and government regulation is ineffective and interferes with free market movements. 1) Does self-regulation work? Give examples of where it has worked well and where it has not. For this, think globally. 2) One argument is that self-regulated businesses with amenities attract more (and better) labor, forcing other businesses to improve in order to hire. Case A: There are two businesses: S has excellent safety precautions while P does not. Both offer the same wage for the same job. Employees are attracted to S, so P must improve to get future employees. You can use the same argument for almost any benefit. Case B: The same two firms, but now firm P pays a higher wage (perhaps even double). Does S lower their standards and raise wages? How can S attract employees? The discussion should center on when self-regulation works, how to make it more effective and areas where self-regulation cannot be used (and why). NOTE THIS IS AT A DOCTORATE LEVEL

Answered Same DayDec 22, 2021

Answer To: In free markets, we tend to think of government regulation as bad: markets can regulate themselves...

Robert answered on Dec 22 2021
121 Votes
Free Market Economy
Free Market economy is an economy under which the allocation of resources or the price of the
good is determined by the forces of demand and supply. The free market economy is considered
more as a theoretical concept because every country, even the capitalist economy places some
limitations or restrictions on the ownership, exchange of commodities and prices of goods. In
free market economy government control is almost negligible. It is an idealized form of economy
where buyers are sellers are permitted to make transactions freely (i.e. buy/sell/trade) on the
basis of mutual agreement on price without any intervention from state in the form of taxes,
subsidies or regulation.
In financial markets, free market stocks are commonly traded and their prices are not influenced
by availability. In foreign exchange markets, the exchange rates are not pegged by the
government and thus they fluctuate freely by the forces of demand and supply for currency. It
can be concluded that free market is the summary concept for an array of exchanges that take
place in society. The exchange is the voluntary agreement between the two parties who are
trading with each other. In reality, free market...
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