Which of the Following Statements Is False

question 46

Multiple Choice

Which of the following statements is false?

• A) In many other countries, the central conflict is between what are called "controlling shareholders" and "minority shareholders."
• B) Controlling shareholders can make decisions that benefit them disproportionately relative to the minority shareholders, such as employing family members rather than the most talented managers or establishing contracts favorable to other family controlled firms.
• C) As recent events and corporate scandals have shown, investor protection in the United States is generally seen as substandard when compared to the developed economies in the world.
• D) Much of the focus in the United States is on the agency conflict between shareholders, who own the majority of a firm but are a dispersed group, and managers, who own little of the firm and must be monitored.

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Definitions:

Potential Output

The maximum level of economic productivity that can be maintained in the long run without causing inflation to rise.

Governmental Intervention

Actions taken by a government to affect the economy, which can include regulations, subsidies, and taxes.

Discretionary Policy

Economic policies based on judgment decisions by policymakers, as opposed to rules-based policies, to manage the economy.

Policy Tools

Policy tools are mechanisms used by government or monetary authorities to influence the economy, such as interest rates, taxation, and government spending.