Which of the following is true?
A)In a competitive capital market, private investors have a strong incentive to evaluate projects carefully and allocate their funds toward those projects expected to yield the highest rates of return.
B)In a competitive environment, profitable investment projects will tend to increase the wealth of the nation.
C)When investment funds are allocated by governments (rather than capital markets), political clout rather than the expected rate of return will generally determine which projects are undertaken.
D)All of the above are correct.

Question

Quizplus · Accepted Answer

In a competitive capital market, investors aim for high returns (A). Profitable projects increase national wealth (B). Government allocation often involves political influence (C). Thus, all statements are correct.

Which of the Following Is True