According to an Economic Principle, What Is the Effect of Government

question 30

Multiple Choice

According to an economic principle, what is the effect of government intervention in the presence of a market failure?

• A) Government action does not improve on the market outcome because sometimes public policies simply reward the politically powerful.
• B) Government action does not improve on the market outcome because some leaders are not fully informed.
• C) Government action can sometimes improve on the market outcome.
• D) Government action will always improve on the market outcome.

Distinguish between direct and indirect methods for calculating cash flows from operating activities.

Analyze the impact of changes in balance sheet accounts on cash flows.

Compute cash flows associated with the sale or purchase of plant assets.

Calculate depreciation and its effect on cash flow from operating activities.

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Definitions:

Negligence

The failure to exercise the care that a reasonably prudent person would exercise in like circumstances, leading to unintended harm.

Proximate Cause

A legal concept that identifies the primary cause of damage or injury in a negligence lawsuit, determining the extent of a defendant's liability.

Gas Cans

Portable containers designed specifically for the storage and transport of gasoline or other flammable liquids.

Foreseeable

An event or consequence that a reasonable person would expect to occur under the circumstances.