At the Most Basic Level, the Distinguishing Characteristic of Government

question 132

Multiple Choice

At the most basic level, the distinguishing characteristic of government that makes it different from private firms is

• A) the difference in incentive structure motivating economic activity.
• B) its ability to direct resources in a manner that is more economically efficient.
• C) its ability to produce goods and services that people value.
• D) its ability to use coercive force against people to modify their behavior or force them to pay for a good or service whether they benefit from it or not.

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Definitions:

Operating Leverage

A measure that shows how revenue growth translates into growth in operating income, highlighting the impact of fixed costs.

Financial Performance

An assessment of how well a company can use assets from its primary mode of business and generate revenues.

ROE

Return on Equity; a financial ratio indicating the profitability of a company in relation to its equity capital.

EPS

Earnings Per Share; a metric that indicates the portion of a company's profit allocated to each outstanding share of common stock.