Which of the Following Statements Is CORRECT

question 27

Multiple Choice

Which of the following statements is CORRECT?

• A) Most businesses (by number and total dollar sales) are organized as proprietorships or partnerships because it is easier to set up and operate in one of these forms rather than as a corporation.
• However, if the business gets very large, it becomes advantageous to convert to a corporation, primarily because corporations have
• Important tax advantages over proprietorships and partnerships.
• B) Due to limited liability, unlimited lives, and ease of ownership transfer, the vast majority of U.S. businesses (in terms of number
• Of businesses) are organized as corporations.
• C) Due to legal considerations related to ownership transfers and limited liability, most business (measured by dollar sales) is conducted by corporations in spite of large corporations' often
• Less favorable tax treatment.
• D) Large corporations are taxed more favorably than sole
• Proprietorships.
• E) Corporate stockholders are exposed to unlimited liability.

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Definitions:

PQ Falls

This term is not sufficiently defined to provide a clear and specific definition without additional context; it could potentially relate to a concept within economics, involving a decrease in quantity (Q) and price (P).

PQ Rises

Indicates an increase in the product of price (P) and quantity (Q), suggesting growth in total revenue or output.

Rational Expectations Theorists

Economists who believe that individuals make predictions about the future based on all available information, thus affecting their economic decisions.

Downwardly Flexible

Refers to the ability of wages or prices to decrease in response to market conditions.