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, by restricting business risk to owners and investors, firms can more easily attract inputs such as labor and capital because these inputs do not have to bear the business risks themselves. This separation of risk encourages more resources to flow into business ventures, enhancing economic activity and innovation.

A Market System Tends to Restrict Business Risk to Owners