One Problem That Might Occur as a Result of Economic

question 17

Multiple Choice

One problem that might occur as a result of economic regulation is

• A) the firm may be earning more than a normal rate of return on investment.
• B) the quality of service might be lowered.
• C) that social regulation may follow.
• D) the demand for the good may be greater than the supply.

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Definitions:

Non-Controlling Interest

The portion of equity in a subsidiary not attributable, directly or indirectly, to a parent company.

Intercompany Profits

Profits that arise from transactions between companies under the same parent company, usually eliminated during consolidation of financial statements.

Non-controlling Interest

An ownership stake in a corporation where the stake does not grant the investor sufficient voting power to dictate corporate policy.

Entity Method

An approach in accounting where the financial performance and position of a business entity are considered separately from its owners.