A Country Without a Stable and Effective Government Capable of Protecting

question 43

Multiple Choice

A country without a stable and effective government capable of protecting private property rights and enforcing private contracts will typically

• A)fail to develop a healthy economy.
• B)fail to avoid persistent government budget deficits.
• C)develop a liberal, multi-party parliamentary democracy.
• D)fail to prevent excessive foreign direct investment.

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Definitions:

No-par Common Stock

Shares issued without a specified face value, allowing the company flexibility in setting their price.

Stated Value

A value assigned to no-par stock by the board of directors of a company, used as the basis for capital accounts in the shareholders' equity section of the balance sheet.

Par Preferred Stock

A type of preferred stock that has a nominal face value and is entitled to dividends before any dividends can be issued to common stockholders.

Retained Earnings

Profits that a company has kept or retained rather than distributing to shareholders as dividends.