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market economy (P1)<br />An economy with extensive private ownership of capital and with allocation of goods and services by the price mechanism in the absence of government intervention. The PHYSIOCRATS and CLASSICAL ECONOMISTS praised this form of economy; NEOCLASSICAL ECONOMISTS have analysed it in detail, e.g. by showing how a system of coMPETITIVE TRADING is used for the exchange of all commodities. For a market economy to flourish, goods must be available in competitive markets at prices which reflect their long-run scarcities and businesses must be motivated by profit.
<strong>Fixed rate</strong> – An interest rate that is fixed at the time the loan is obtained (as opposed to a variable rate, which may change at specific times or based on specific indicators). As of July 1, 2006, interest rates on FFEL Program loans are fixed, replacing the variable rate loans that existed prior to that date.
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