Which One of the Following Best Describes the Primary Advantage

question 28

Multiple Choice

Which one of the following best describes the primary advantage of being a limited partner instead of a general partner?

• A)tax-free income
• B)active participation in the firm's activities
• C)no potential financial loss
• D)greater control over the business affairs of the partnership
• E)maximum loss limited to the capital invested

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Definitions:

Income Disparity

The uneven distribution of income across different groups within a society.

First Mover

A company that gains a competitive advantage by being the first to market with a new product or service.

Theory of Absolute Advantage

An economic theory proposed by Adam Smith, which suggests that countries should specialize in the production of goods for which they have an absolute advantage.

Theory of Comparative Advantage

An economic principle stating that countries or entities benefit from specializing in and exporting goods for which they have a lower opportunity cost.