Asked by Samantha Ortiz on Jul 19, 2024
Verified
A market system tends to restrict business risk to owners and investors.This results in which of the following benefits?
A) A more stable macroeconomy with fewer recessions.
B) Firms are better able to attract inputs,as these inputs do not have to share the risk.
C) Government agencies are better prepared to help when businesses fail.
D) Consistently lower prices for consumers.
Business Risk
The exposure to factors that may cause a business to experience lower than expected profits or even losses, including market changes, regulatory changes, and operational failures.
Macroenconomy
The branch of economics that studies the behavior and performance of an economy as a whole, focusing on national income, unemployment, and inflation.
- Recognize the difficulties in addressing risk management within command and market economies.
- Grasp the concept of consumer sovereignty and its implications for product success in the market.
Verified Answer
MA
mariam alfatlawiJul 23, 2024
Final Answer :
B
Explanation :
In a market system, business risk is restricted to owners and investors, which means that input providers such as labor and capital do not have to bear the risk. This makes it easier for firms to attract these inputs, which can lead to greater efficiency and productivity. However, this does not necessarily result in a more stable macroeconomy or consistently lower prices for consumers, and government agencies are not necessarily better prepared to help when businesses fail.
Learning Objectives
- Recognize the difficulties in addressing risk management within command and market economies.
- Grasp the concept of consumer sovereignty and its implications for product success in the market.