The Result That, Under Certain Circumstances, No Government Action Is

question 36

Multiple Choice

The result that, under certain circumstances, no government action is needed to control an externality because it can be eliminated by bargaining between the affected parties is called

• A)a Nash Equilibrium.
• B)the Coase Theorem.
• C)the Bargaining Theorem.
• D)English Bargaining.

---

Definitions:

Treasury Stock

Shares that were issued and subsequently reacquired by a company, held in its own treasury.

Stockholders' Equity

Represents the owners' residual interest in the assets of a corporation after deducting liabilities.

Prior Period Adjustment

Corrections of material errors related to a prior period or periods, excluded from the determination of net income.

Retained Earnings

The portion of a company's profits that is kept or retained for reinvestment in the business, rather than being distributed to shareholders as dividends.