All of the Following Are Advantages of a Sole Proprietorship

question 70

Multiple Choice

All of the following are advantages of a sole proprietorship except ________.

• A) creating one is easy and inexpensive
• B) unlimited liability
• C) it is not subject to double taxation
• D) the owner maintains complete control of the business
• E) business losses can be deducted against the sole proprietor's other sources of income

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Definitions:

Government Failure

The occurrence when government actions lead to outcomes that are inefficient or not beneficial to society, contrary to its intended outcomes.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a welfare loss.

Government Failure

A situation where government intervention in the economy creates inefficiency and leads to a misallocation of resources.

Federal Money

Funds provided by the federal government, often to support state or local projects, policies, or to provide social services.