Government policies are coercive, whereas markets are not.This implies that

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The statement implies that government policies use force to enforce compliance, whereas market transactions are voluntary. This does not necessarily mean that government activity will always be less efficient than market activity (option A). It also does not mean that households cannot maximize utility if they consume any government goods and services (option B). The statement also does not imply that market transactions result in an equal number of gainers and losers (option C) or that self-interest and public interest are always in conflict (option D). However, it does suggest that there are limitations to the market economy, and that there are cases where private markets may not be able to provide certain goods and services (such as national defense, infrastructure, and public health), and in these cases, the government can step in to provide them (option E).

Government Policies Are Coercive, Whereas Markets Are Not