Which of the following statements is true about risk management in market systems versus command systems?
A) Market systems manage risk better because entrepreneurs taking risks bear the costs of poor decisions,where in command systems government decision makers don't bear those costs.
B) Neither system is better than the other in terms of risk management;both systems are equally susceptible to natural disasters and changes in consumer preferences.
C) Command systems manage risk better because the government controls most economic activity and can therefore eliminate risk.
D) Market systems face risk because of the possibility of profits and losses;command systems don't face risk because they are not profit driven.

Question

Quizplus · Accepted Answer

In market systems, entrepreneurs bear the costs of poor decisions, which encourages them to carefully manage risks. In contrast, command systems rely on government decision makers who do not face the same consequences for poor decisions, leading to potentially higher levels of risk.

Which of the Following Statements Is True About Risk Management