Which of the following guides sensible decisions regarding the management of business risk in a market system?
A)the profit and loss system
B)the "invisible hand"
C)taxes and subsidies
D)consumer sovereignty

Question

Quizplus · Accepted Answer

The profit and loss system guides sensible decisions regarding the management of business risk in a market system because it provides incentives for businesses to make decisions that are in the best interests of their shareholders. When a business makes a profit, it is able to reinvest that profit in its operations, which can help it to grow and become more successful. Conversely, when a business makes a loss, it is forced to make changes to its operations in order to avoid bankruptcy. This system of rewards and punishments helps to ensure that businesses make decisions that are in the best interests of their shareholders and the economy as a whole.

Which of the Following Guides Sensible Decisions Regarding the Management