Which of the following is NOT one of the main roles of the government in the U.S. market economy?

• A. Providing public goods
• B. Enforcing property rights
• C. Setting prices for all goods and services
• D. Regulating externalities

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the main roles of government in a market economy. Typically, these include providing public goods, enforcing property rights, and regulating externalities to correct market failures.
2. Step 2: Define 'public goods' as goods that are non-excludable and non-rivalrous, meaning they are provided by the government because private markets may underproduce them.
3. Step 3: Recognize that 'enforcing property rights' is essential for markets to function properly, as it ensures individuals and firms can own and trade resources securely.
4. Step 4: Understand 'regulating externalities' as government intervention to address costs or benefits that affect third parties, such as pollution, which markets alone may not handle efficiently.
5. Step 5: Identify that 'setting prices for all goods and services' is not a main role of the government in the U.S. market economy, as prices are generally determined by supply and demand in competitive markets.