If an External Cost Is Present in a Market, Economic

question 209

Multiple Choice

If an external cost is present in a market, economic efficiency may be enhanced by:

• A) increased competition.
• B) weakening property rights.
• C) better informed market participants.
• D) government intervention.

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Definitions:

Return On Plan Assets

A measure of the earnings generated from the investments within a pension fund, indicating the efficiency and performance of the asset management.

Pension Expense

The cost recognized in an employer's financial statements for the benefits provided to employees during a period.

Defined Contribution

A type of retirement plan where the amount invested is defined, but the future benefits are not guaranteed and depend on investment performance.

IFRS

International Financial Reporting Standards, a set of accounting standards developed by the International Accounting Standards Board (IASB).