Which of the Following Is True

question 77

Multiple Choice

Which of the following is true?

• A)In a competitive capital market, private investors have a strong incentive to evaluate projects carefully and allocate their funds toward those projects expected to yield the highest rates of return.
• B)In a competitive environment, profitable investment projects will tend to increase the wealth of the nation.
• C)When investment funds are allocated by governments (rather than capital markets), political clout rather than the expected rate of return will generally determine which projects are undertaken.
• D)All of the above are correct.

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Definitions:

LLC

A Limited Liability Company is a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Members

Members typically refer to individuals or entities that belong to a group, organization, or body, holding certain rights and responsibilities within that organization.

Management and Control

The process and authority to direct an organization or entity, including making decisions regarding its operations, resources, and policies.

Limited Partner

An investor in a partnership who does not have managerial control and whose liability for the partnership's debts is limited to the amount they invested in the business.