Free Enterprise


DEFINITION of 'Free Enterprise'

An economic system where few restrictions are placed on business activities and ownership. In this system, governments generally have minimal ownership of enterprises in the market place. This system aims for limited restrictions on trade and minimal government intervention.


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BREAKING DOWN 'Free Enterprise'

The free enterprise movement started in the 1700s, when many individuals were restricted from starting and owning their own business without the permission of the government. The movement looked to reduce ownership and other related restrictions, such as how one should operate their business and who they were allowed to trade with.

Over time, the focus of this movement has shifted. A lot of its causes have been incorprated in most free-market systems. In the U.S. free enterprise advocates continue to fight for fewer restrictions along with fighting against any new developments that would restrict free enterprise.

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  1. Why is free enterprise often associated with being politically conservative?

    In abstract political economic terms, classic conservatism is concerned with preserving existing social institutions. One ... Read Full Answer >>
  2. What economic measures can be taken to encourage free enterprise?

    Most advocates of a free enterprise system believe that beneficial market activity is best encouraged by being left alone ... Read Full Answer >>
  3. How do you make working capital adjustments in transfer pricing?

    Transfer pricing refers to prices that a multinational company or group charges a second party operating in a different tax ... Read Full Answer >>
  4. What is the utility function and how is it calculated?

    In economics, utility function is an important concept that measures preferences over a set of goods and services. Utility ... Read Full Answer >>
  5. What does marginal utility tell us about consumer choice?

    In microeconomics, utility represents a way to relate the amount of goods consumed to the amount of happiness or satisfaction ... Read Full Answer >>
  6. What is the difference between JIT (just in time) and CMI (customer managed inventory)?

    Just-in-time (JIT) inventory management focuses solely on the need to replenish inventory only when it is required, reducing ... Read Full Answer >>

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