Which of the Following Suggests That Private Markets Can Be

question 448

Multiple Choice

Which of the following suggests that private markets can be effective in dealing with externalities?

• A)the "invisible hand"
• B)the law of diminishing social returns
• C)the Coase theorem
• D)technology policy

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Definitions:

Joint Venture Investment

A joint venture investment is a business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Acquisition Differential

The difference between the purchase price of an acquired company and the fair value of its identifiable tangible and intangible assets.

Retained Earnings

The portion of net earnings not distributed as dividends but retained by the company to be reinvested in its core business or to pay debt.

Cost Method

An accounting method used to recognize investments in which the investor has no significant influence over the investee, recording the investment at cost and recognizing dividends as income.