I need help with #1-3. Thank you. 1. Explain why the Friedmans think that free m

Question

I need help with #1-3. Thank you.

1. Explain why the Friedmans think that free market capitalism both supports individual liberty and is an expression of individual liberty.

2. Explain how the Friedmans see market signals (prices, wages, rents, etc.) as providing the incentives for production, work, capital investment, human capital and technological change as if economic activity were coordinated by an invisible hand.

3. Explain why the Friedmans believe that free markets provide incentives to reduce racism and sexism in employment.

Explanation / Answer

a free market is an idealized system in which the prices for goods and services are determined by the open market and by consumers. In a free market the laws and forces of supply and demand are free from any intervention by a government, by a price-setting monopoly, or by other authority. Proponents of the concept of free market contrast it with a regulated market, in which a government intervenes in supply and demand through various methods - such as tariffs - used to restrict trade and to protect the local economy. In an idealized free-market economy, prices for goods and services are set freely by the forces of supply and demand and are allowed to reach their point of equilibrium without intervention by government policy.

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