Question

Describe how financial security is handled in the free-market system. Give an example to support your answer.

Answer 1

Answer:Financial security is handled by the state in two ways the first one is making sure the wealth is distributed and that the private institutions managing the wealth of individuals who require their services act under the law.

Explanation:

First of all, let's analyze the answer. By existing government or state managed institutions to regulate the wealth and the distribution of wealth, the government can assure that the system is balanced. But for this to happen there has to be production and progress, if we don't have production and progress then we won't be able to get an income. Thus, progress and production is not equal in the free market, but we all can become progressively productive, this measn we can save and reinvest to become more productive. Now, if we didn't have state institutions to manage a system's wealth we would leave everyone with the responsibility of managing their wealth, people with knowledge would do it nice, but people without it would lose. Also, we need everyone to be productive because if not, we would distribute the wealth generated by some. Financial security in the free market is a complex activity however is not impossible. That is why we have private institutions offering services as state owned and the private are regulated by the state, to make sure they work properly and when needed make moves to keep wealth assured and not lose everything.

Answer 2

Answer:

In the free-market system, security is handled by hired Private contractors. An example would be a security guard at a bank. Free market security usually consists of competing for private defense agencies with a system of insurance and third party watchdog groups to prevent abuse.In the free-market system, security is handled by hired Private contractors. An example would be a security guard at a bank. Free market security usually consists of competing for private defense agencies with a system of insurance and third party watchdog groups to prevent abuse.

The free market is an economic system based on supply and demand with little or no government control. It is a summary description of all voluntary exchanges that take place in a given economic environment. Free markets are characterized by a spontaneous and decentralized order of arrangements through which individuals make economic decisions. Based on its political and legal rules, a country’s free market economy may range between very large or entirely black market.

While no pure free market economies actually exist, and all markets are in some ways constrained, economists who measure the degree of freedom in markets have found a generally positive relationship between free markets and measures of economic well being.

A key feature of free markets is the absence of coerced transactions or conditions on transactions.