Which of the Following Statements Is True of Conflicts of Interests

question 3

Multiple Choice

Which of the following statements is true of conflicts of interests?

• A)Self-interest makes it easy for individuals to fulfill their gatekeeper duties.
• B)Legal protection cannot shield professionals from conflicts of interests.
• C)Cross-selling of consulting services reduces conflicts of interests.
• D)Excessive executive compensation involves conflicts of interests.

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Definitions:

Expansionary Gap

Occurs when an economy's actual output is higher than the potential output, often leading to higher inflation.

Active Approach

A management strategy where decisions are made using discretionary methods to try to outperform the market or a specific benchmark.

Potential GDP

Potential GDP is the maximum possible output an economy can produce with full employment of its resources, without causing inflation.

Actual GDP

The total market value of all goods and services produced within a country in a specific period, measuring the economy's real output without adjustment for inflation.