Which of the Following Are the Basic Principles on Which

question 95

Multiple Choice

Which of the following are the basic principles on which the market model is based?

• A) Management incentives should be aligned with those of shareholders and other major stakeholders
• B) Transparency of financial statements
• C) Equity ownership should be widely dispersed
• D) A & B only
• E) A, B, and C only

---

Definitions:

Corporations

Entities created by law that have a distinct existence separate from their owners, capable of performing legal actions.

Market Economy

An economic system in which economic decisions and the pricing of goods and services are guided chiefly by the aggregate interactions of a country's citizens and businesses.

Personal Liability

The legal responsibility of an individual to cover the loss or damage incurred by their actions, potentially affecting their personal assets.