In which of the following ways is the U.S. free-market system distinct from most European economies?

• A. The U.S. economy relies more heavily on state-owned enterprises.
• B. The U.S. generally has less government intervention in markets.
• C. The U.S. has higher average tax rates than European countries.
• D. The U.S. provides more extensive universal healthcare coverage.

Answer: (B)

Verified step by step guidance

1. Step 1: Understand the characteristics of a free-market economy, which typically features limited government intervention, private ownership of resources, and market-driven prices.
2. Step 2: Compare the role of government intervention in the U.S. economy versus most European economies, noting that European countries often have more regulations, social welfare programs, and government involvement in markets.
3. Step 3: Analyze the options given: the U.S. does not rely more heavily on state-owned enterprises; in fact, European countries tend to have more state ownership in certain sectors.
4. Step 4: Consider tax rates and social programs: European countries generally have higher average tax rates and more extensive universal healthcare coverage compared to the U.S.
5. Step 5: Conclude that the key distinction is that the U.S. generally has less government intervention in markets, which aligns with the characteristics of a free-market system.