In a market economy, the government's ability to coerce is beneficial in the following cases, except in:

Question

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In a market economy, prices are determined by the interaction of supply and demand. Fixing resource prices would disturb this mechanism and lead to market inefficiencies. On the other hand, correcting for positive or negative externalities and producing public goods are situations where the government's coercive power is necessary to ensure that markets allocate resources efficiently.

In a Market Economy, the Government's Ability to Coerce Is