producers make business decisions in a market economy.
who makes business decisions in a market economy?
producers
market economy





























a market economy is an economic system in which the decisions regarding investment, production and distribution are guided by the price signals created by the forces of supply and demand. the major characteristic of a market economy is the existence of factor markets that play a dominant role in the allocation of capital and the factors of production.
market economy
when erhard succeeded johannes semmler as director of the administration for economics in the bizonal economic council on 2 march 1948, the social market economy entered the political sphere. soon after on 21 april 1948, erhard informed the parliament about his economic policy and introduced the concept of the social market economy. although there was no unanimous applause, both the liberal democrats and the conservatives widely welcomed the transition to a more market-oriented economy. thereupon, the chairman of the christian democratic union (cdu) in the british zone of occupation, konrad adenauer, invited erhard to also inform the party members about his socio-economic conception at the party convention in recklinghausen, germany on 28 august 1948. in a visionary and stirring speech, entitled "marktwirtschaft im streit der meinungen" ("market economy in dispute"), erhard defended his concept of the social market economy alluding to the dualism between a controlled economy and a market economy. in view of the upcoming regional and federal elections, adenauer, who was initially sceptical about erhard, was not only impressed by the polarising slogan, i.e. "controlled or market economy", but also by the efficacy of erhard and his programme. the foundation for a successful political alliance was laid.
social market economy