A Market System Tends to Restrict Business Risk to Owners

question 79

Multiple Choice

A market system tends to restrict business risk to owners and investors. This results in which of the following benefits?

• A) a more stable macroeconomy with fewer recessions
• B) Firms are better able to attract inputs, as these inputs do not have to share the risk.
• C) Government agencies are better prepared to help when businesses fail.
• D) consistently lower prices for consumers

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Definitions:

Held-to-Maturity Bonds

Bonds that an issuer has the intent and ability to hold until a defined maturity date.

Accrued Interest

Interest that has been earned but not yet received in cash or recorded by the payee.

Interest Revenue

The income a company receives from its investments in interest-bearing accounts or other instruments.