What Conclusions Can Be Drawn from the Countervailing Forces Model

question 56

Essay

What conclusions can be drawn from the countervailing forces model in the BGS relationship?
A.Business is deeply integrated into an open society and must respond to many forces,both economic and noneconomic.It is not isolated from any part of society,nor is it always dominant.
B.Business is a major force acting on government,the public,and environmental factors.Business often defeats labor,wins political battles,and shapes public opinion.It consumes natural resources.
C.To maintain broad public support,business must adjust to social,political,and economic forces it can influence but not control.
D.BGS relationships evolve as changes take place in the ideas,institutions,and processes of society.

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Definitions:

Combined Margin

The total margin that results from combining the gross margin and net margin of a company.

Contribution Margin Ratio

A financial metric that shows the percentage of sales revenue that is not consumed by variable costs and contributes to covering fixed costs.

Fixed Expenses

Costs that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Residual Income

The amount of income that exceeds the minimum rate of return on a project or investment.