Corporations are able to raise large amounts of financial capital because
A) of the tax breaks corporations are given relative to partnerships or proprietorships.
B) of the elimination of the problem of separation of ownership and control.
C) of limited liability and the treatment of a corporation as an individual entity.
D) of their greater ability to monitor the performance of decision makers.
Answer: C
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What is meant by the term "rational ignorance"?
A) It refers to the fact that policymakers and their constituents have different ideas of what it means to behave rationally and each party deliberately ignores the other's view. B) It refers to the absence of a negative incentive, such as levying a fine for not voting, which results in low voter turnout. C) It refers to a situation where one policymaker deliberately approves legislation he does not support in exchange for a future favorable vote for his own cause. D) It means the lack of an economic incentive for voters to become informed about a pending vote.
The foreign exchange rate describes the
A) balance of trade. B) balance of payments. C) law of comparative advantage. D) price of foreign currency in terms of domestic currency.