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.

Question

Quizplus · Accepted Answer

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.

A Market System Tends to Restrict Business Risk to Owners