Which One of the Following Statements About the Theory of Property

question 8

Multiple Choice

Which one of the following statements about the theory of property rights is true?

• A)Employees should be given ownership of the firm, if their investments in their human capital are highly specific to the firm.
• B)Firms should not be in the form of partnerships unless they operate in the financial sector.
• C)Property rights should always confer more cash flow rights than control rights.
• D)None of the above.

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Definitions:

Independent Agencies

Government organizations that operate independently of the executive departments, tasked with regulating and overseeing specific areas of public policy.

Social Regulation

Rules imposed by government to correct market failures and achieve social policy goals, such as environmental protection and worker safety.

Executive Agencies

Agencies of the executive branch of government that are task-focused and responsible for the execution of laws and government policies.

Economic Regulation

Government-imposed restrictions on the economic activities of individuals or companies to correct market failures or achieve social goals.