Which of the Following Statements Best Describes the Phenomenon Called

question 26

Multiple Choice

Which of the following statements best describes the phenomenon called risky shift?

• A) Groups do not accept higher risks than individuals.
• B) A corporation shifts its risk onto its customers.
• C) A group of people who must reach a consensus on an acceptable level of risk often decide on a level of risk higher than the risk they would accept as individuals.
• D) The decisions made by a team of managers may have lower levels of risk and may create lesser legal problems than decisions made by an isolated manager.

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Definitions:

Consumption Function

As income rises, consumption rises, but not as quickly.

John Maynard Keynes

A British economist whose theories on government intervention in economies (Keynesian economics) have greatly influenced modern macroeconomic policies, particularly regarding the use of fiscal and monetary measures.

Karl Marx

A 19th-century philosopher, economist, and political theorist known for his critique of capitalism and the development of Marxist theory.

Milton Friedman

An influential American economist and Nobel laureate known for his strong belief in free-market capitalism and minimal government intervention.