Free Market Principles
The free market principle is an economic system where firms and individuals have free will to make financial decisions regarding buying and selling goods and services. In this system, there is no government intervention to bring any regulations. The findings on investments on lands, stock, and other areas of the economy are purely made based on the market forces of demand and supply. These forces determine prices for everything, and there is freedom of entry and leaving the market for all. Some countries have regard to free-market principles while others practice it partially. However, none of the world economies has a pure free-market system. For instance, the United States and Singapore enact free-market principles to enable long-term growth. Germany and South Korea are more interventionists in the economic systems.
Capital mobility refers to a situation whereby investors move from one country and invest in another where returns are better, and the cost of doing business is the lowest. Economic globalization enables people to invest their wealth in countries that can reap good returns. Industries can be established in countries with high volumes of raw materials and cheap labor. Countries with smaller populations, such as Sweden, are more exposed to global economies. Giant countries such as the United States have a rich market where foreign investors can get customers for their products. However, competition is the highest in such countries, with targets from many investors. Many governments are more concerned with creating a conducive business environment where foreign people can invest their money. Capital mobility does not happen in chaotic countries with a series of internal conflicts.