The Fundamental Characteristic of the Corporate Form of Business Organisation

question 8

Multiple Choice

The fundamental characteristic of the corporate form of business organisation that gives rise to the need for governance mechanisms is:

• A) the separation of ownership and control.
• B) mutual agency.
• C) the lack of separation of ownership and control.
• D) the abuses by professional managers.

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Definitions:

Expansionary Gap

A situation where the actual level of output in an economy exceeds its potential output, often leading to inflation.

Active Approach

An active approach in policy-making or investment strategy entails ongoing, deliberate interventions or decisions to achieve specific economic or financial goals.

Potential Output

The maximum level of real GDP that can be produced when all resources are fully employed in an economy, indicating its productive capacity.

Real GDP

The total value of all goods and services produced within a country, adjusted for inflation, providing a more accurate measure of economic performance.