Which of the Following Statements Best Summarizes "Contract Theory" as Spelled

question 70

Multiple Choice

Which of the following statements best summarizes "contract theory" as spelled out by philosopher Thomas Hobbes?

• A)The government should be required to return to citizens any excess taxation revenue that is collected in a given year.
• B)Each citizen should be required to serve in the military for at least two years starting at the age of 18.
• C)The people of a country voluntarily give up some freedom in exchange for an ordered society.
• D)Every business should be managed by the government in order to ensure an equitable distribution of wealth.

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Definitions:

Fair Value

The amount one would get from selling an asset or would need to spend to settle a liability in a well-organized sale involving market players on the date of evaluation.

Tax Rate

The fraction of earnings on which the government imposes taxes for individuals or corporations.

Consolidation Worksheet Entry

An accounting entry used in the preparation of consolidated financial statements which adjusts for intercompany transactions and balances.

Treasury Stock

Shares of a company's own stock that it has repurchased from investors but not yet retired.