Why Is National Defence a Classic Example of a Public

question 36

Multiple Choice

Why is national defence a classic example of a public good

• A)Private security services are very difficult to find.
• B)It is difficult to exclude people from receiving the benefits from national defence once it is provided.
• C)Everyone agrees that some level of national defence is important, but only the government knows the optimal amount.
• D)If individuals were required to purchase their own armoured tank, there wouldn't be enough tanks to go around.

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Definitions:

Dividend Payout

A portion of a company's earnings that is distributed to shareholders.

External Financing Needed

The additional funding a firm requires to finance its spending plans, such as investments in fixed assets or increases in working capital, beyond what can be funded by internal sources.

Dividend Payout Ratio

A metric indicating the proportion of a company's net profits paid out to its shareholders as dividends.

Profit Margin

A financial performance ratio that shows the percentage of profit a company produces from its total revenue.