The Pros And Cons Of Chile

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Chile has a free-market oriented economic system whereas for prices for goods and services are fixed by the law of supply and demand and all are allowed to reach their equilibrium without intervention by the government or any other outside bodies. In a free market system a buyer and a seller transact freely only when they voluntarily agree on a price of a good or a service. This relationship of supply and demand affects the market and the price of a product.
The law of supply and demand states that when there is high demand for a good or service, the price of the good or service rises. If there is a large supply of a good or service but not enough demand for the good or service, the price falls. Each transaction involves a buyer and a seller. The seller places an offer for an item and the buyer may accept or reject the offer. When there is a high demand for certain good in a particular city or country and a lack of supply for a quality good, the prices tend to rise as well. Also, when there is no demand for a certain good due to a weak economy and an
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Chile has signed Free Trade Agreement (FTA) with a whole network of countries, including a Free Trade Agreement with the United States that was signed in 2003 and was only implemented in January 2004 (En.m.wikipedia.org, 2017).
As the world’s largest producer of copper, Chile has been hit hard by the dramatic slump in prices. It’s not just that Chile is a big player in the copper market; the copper industry is also a big player in the Chilean economy. As noted by Stratfor, “49% of the country’s exports are related to the copper industry, and mining activities account for about 14% of Chile’s gross domestic product.” But Chile has weathered the drop in copper prices — which have plunged by 35 percent since their peak in 2011 — thanks to government policies enacted in the recent past. This can be seen the picture
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