What are the key ingredients of economic freedom? Is Hong Kong the world’s freest economy?

Expert Solution

Economic freedom is the ability of people of a society to take economic action.The key ingredients of economic freedom are personal choice, voluntary exchange, freedom to compete in market and protection of person and property.Institutions and policies are consistent with economic freedom when they allow voluntary exchange and protect individual and their property.government can promote economic freedom by providing a legal structure and a law enforcement system that protect the property rights of owner and enforce contract.thusbis also require government to refrain from taking people's property and from interfering with personal choices, voluntary exchange and the freedom to enter and compete in labor and product market.when government substitute taxes , government expenditure and regulations for personal choice, voluntary exchange and market coordination they reduce economic freedom.

Yes Hong Kong is the freest economy in the world.it has relatively low taxes ,a good legal system, sound money,free trade and minimal regulations and it has had these institution and policies in place for several decade.

Rahul Sunny answered 2 years ago

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