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 typically borne by owners and investors rather than shared with input providers or consumers. This allows firms to better attract inputs, as these providers do not have to shoulder the risk. However, it does not necessarily result in a more stable macroeconomy or consistently lower prices for consumers, nor does it make government agencies better prepared to help failing businesses.

A Market System Tends to Restrict Business Risk to Owners