Proponents of the Free-Market Approach to the Provision of Accounting

question 1

Multiple Choice

Proponents of the free-market approach to the provision of accounting information advocate that:

• A)Market mechanisms cannot achieve a socially ideal equilibrium price for accounting information
• B)Market forces can be depended upon to generate any desired information
• C)The free-rider effect will result in an under-production of accounting information
• D)All of the above

---

Definitions:

Correlated Objects

Items or variables that have a mutual relationship or connection, where changes in one are associated with changes in the other.

Causal Relationship

A connection between two events where one directly influences or causes the other.

Causal Arguments

Arguments that establish a cause-and-effect relationship between two or more things.

Inductive Argument

A type of reasoning in which the premises seek to supply strong evidence for (not absolute proof of) the truth of the conclusion.