What Are Market-Based Solutions

question 29

Multiple Choice

What are market-based solutions?

• A) reform options, such as tax credits and free-market investments, that substitute for government-sponsored social programs
• B) reforms applied to societal issues by creating a reliance on government-sponsored social programs
• C) reform options for economic issues that solve problems by passing social programs, such as those passed in the New Deal
• D) another name for a number of social programs passed in the Great Society

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Definitions:

Operating Leverage

A measure of how much a company can increase its operating income by increasing revenue, indicating the ratio of fixed costs to variable costs.

EBIT

Earnings Before Interest and Taxes; a measure of a company's profitability that focuses on earnings generated from its core operations before the impact of financial and tax activities.

Business Risk

The exposure a company or investor faces due to uncertainties in the market or industry that could affect its profitability.

Fixed Assets Turnover Ratio

A financial metric that measures a company's ability to generate sales from its fixed assets, such as property, plant, and equipment.