MONETARY it means ”too much money chasing too

MONETARY
FREEDOM:

Monetary
freedom is linked to the
concept of monetary economics and monetarism. The first is a discipline that
permits the analysis of money and its related function as a medium of exchange,
a valuable unit and a cost unit. The second one is the control of the
government on current money. The monetary freedom can be measured based on two
factors: the price stability (inflation) and the price control.

–      
Inflation:
is monetary phenomenon, an increase in the general price level for buying goods
and service. It can happen within a certain period of time. Its effect is a
loss of money value. Basically, it means ”too much money chasing too few
goods.”

–      
Price
control: is when the government decides to limit prices of goods in the market.

This can happen due to some facts: government wants to avoid consumer’s
exploitation by suppliers, wants to control the rate of inflation, wants to
control the supply. (ensure a shortage).

Monetary
freedom is a combination of these two measures.

Inflation
and price control may lead to significant consequences and distortion of market
activity.

In order to
have monetary freedom, government’s function should be to safeguard property
rights, maintain price stability, fight inflation so that markets can expand.

 

TRADE
FREEDOM:

Trade
freedom is a key ingredient of economic freedom, it implies freedom of exchange
across national boundaries. Trade freedom contributes to the economic prosperity
of a country. It is a policy in which governments of countries don’t dictate
restrictions or trade barriers in importing and exporting services or goods between
countries.

Trade freedom
index in a country can be perceived by two inputs:

–      
The
trade-weighted average tariff: (quantitative measure)

–       NTBs = Non- tariff barrier: (quantity
restrictions, prices restrictions, regulatory, customs restrictions and direct
government intervention) they impede the trade not only imposing tariffs.

Trade freedom is fundamental nowadays since the communication and
transportation through high technology become more and more easier.

More open trade policies do not just promote economic
growth, they encourage freedom, including protection of property rights and the
freedom of average people to buy what they think is best for their families,
regardless of attempts by special interest groups to restrict that freedom.

 

 

INVESTMENT FREEDOM

The investment Freedom permits people and
organizations to invest or move capitals without any limitation both within the
society and out of country’s borders.

Some factors may influence the investment freedom:

–       Corruption

–       Labor regulations

–       Weak infrastructure

–       Political and security conditions

These conditions restrict the freedom of investors. Therefore,
most countries impose restrictions such as restrictions on payments, capital
transactions. Some other countries might want not to invest in a foreign
context.

 

 

FINANCIAL FREEDOM

Financial freedom takes place when government’s action
doesn’t affect financial institutions and the financial sector is free from his
control and interference. In this way, the financial sector can operate with independency
and efficiently enforcing contractual operation and preventing fraud, and have
contact with foreign financial institutions.

The level of financial freedom can be evaluated
according to some factors:

–       Government regulation of financial services

–       Collaboration with foreign firms

–       Government influence on allocation of credit

–       development level of financial market

–       government intervention in banks 

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