In an economy characterized by interaction between buyers and sellers, what term would apply?

A market economy is defined by the interactions between buyers and sellers, where decisions regarding investment, production, and distribution are guided by the supply and demand for goods and services. In this type of economy, prices are determined in a free price system, allowing for voluntary exchanges that reflect the preferences and choices of individuals.

In a market economy, consumers drive demand for products, while producers respond by supplying goods and services, creating a dynamic environment where innovation and competition thrive. This interaction helps allocate resources efficiently as businesses adjust their offerings based on consumer preferences and market signals.

While other types of economies exist—such as a command economy, where government directives drive production and distribution, or a traditional economy, which relies on customs and bartering—these systems do not primarily facilitate the buyer-seller interactions inherent in a market economy. A mixed economy incorporates elements of both market and command economies but still relies on the foundational interactions of buyers and sellers as a core component of its function. Thus, the term that best describes an economy characterized by the interaction between buyers and sellers is indeed a market economy.