Answer:
Resource Immobility
Explanation:
A critical assumption of the resource-based model—resource immobility—is that resources tend to be "sticky" and don't move easily from firm to firm. Because of that stickiness, the resource differences that exist between firms are difficult to replicate and, therefore, can last for a long time
Robert Jonas is in charge of a new marketing effort directed toward Peru. In order for his company to effectively market and distribute to all of Peru's major cities, Jonas must devise a logistics plan for crossing the Andes Mountains on a daily basis. Which of the following foreign environment uncontrollable variables would be a chief concern as Jonas devises his firm's logistics plan?
A. Price
B. Product
C. Geography and infrastructure
D. Promotional strategies
E. Channels of distribution
Answer:
The correct answer is c) Geography and infrastructure
Explanation:
Geography and infrastructure are uncontrollable variables that would be the chief concern as Jonas devise his firm's logistics plan; because Jonas must devise a logistics plan for crossing the Andes Mountains daily; and South America's geography, in special the Andes mountains, are the longest continental mountain range in the world. The Andes are compounded by a lot of peaks of mountains and also have the second most elevated highest peak of any mountain range, just superated by the Himalayan peak.
A ________ is a document manufacturing production personnel use to request that the itemized materials be sent from the storeroom into the factory. A. cost ticket B. materials requisition C. manufacturing ticket D. job cost record
Current production of capital goods means that ____________________________________
a) more consumption goods can be produced now, since there are more production facilities.
b) the production possibilities curve can be expected to shift outward in the future.
c) more resources are being exhausted, so total production will decrease.
d) the production possibilities curve will shift outward now.
the production possibilities curve can be expected to shift outward in the future
D
I tuk tast
Current production of capital goods means that the production possibilities curve can be expected to shift outward in the future. This is because increase in capital goods allows a society to expand its capacity for future production of consumer goods and services.
The current production of capital goods, such as machinery and buildings that are used in the production of other goods, will lead to b) the production possibilities curve can be expected to shift outward in the future. This answer is based on the assumption that an increase in capital goods allows for increased productivity in the future. Essentially, by investing more resources into creating capital goods now, a society is able to expand its capacity for future production of consumer goods and services, hence shifting the production possibilities curve outwardly.In economic models, this outward shift represents the potential for greater economic growth and output. This is because capital goods are essential to improving a country's productive capability. Consequently, production of more capital goods today paves the way for more consumption goods to be produced in future.Learn more about Production of Capital Goods here:
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Entrepreneurship is the component of human resources that performs the functions of organizing, managing, and assembling the other factors of production to create and operate business ventures.
True / False.
Answer: True
Explanation: Entrepreneurship is the ability to create and run a business venture with the aim of generating a profit. This comes in the form of starting new businesses. It takes into account planning, organising, managing an assembling the 4 factors of production, and using these factors to create a product or service that customers can buy, in exchange for money. The four factors of production are: land, labour, natural resources and capital. It is important to note that although entrepreneurs aim to make a profit, they can also bear risks that can affect their business ventures and thus the profit that they make.
Answer:
The statement is true.
Explanation:
Entrepreneurship refers to the process in which a business is set up. The process helps in the creation of businesses. The person who extends his efforts in setting these businesses is said to be entrepreneurs. They develop, manage and set up the business to earn profit out of it. Also, the risk is involved in this process because of the uncertainties involved in them.
When managers use a management information system, no management action is needed if a activities are performed as planned and standards are met b all employee performance reviews are completed on schedule c there are no changes in the organization d none of the answers is correct
Answer:
d none of the answers is correct
Explanation:
Even in organizations with superb management information systems, manager action is necessary. It´s extremely rare a situation where all the activities are 100% performed as planned and standards met. Fully compliance it´s not compatible with systems where human being is the main resource. Moreover, information systems need human action to keep updated and monitored.
Answer:
none of the answers is correct
Explanation:
State as either a positive or normative statement. An op-ed piece in a newspaper urging the adoption of a particular economic policy would be considered a _________________statement. A research study on the effects of soft drink consumption on children’s cognitive development would be considered a _________________statement.
Answer:
The correct answers are: Normative; Positive.
Explanation:
The positive economy is based on specifying and demonstrating what is happening in the economy, responds to economic issues from reason and with an objective point by which things happen, focuses on determining everything that could affect it and the results that will be obtained by final.
No advice is given to remedy economic problems, rather, it describes the problems that affect the economy without mentioning whether the results will be positive or negative.
If a family spends its entire budget in a given time frame, the family can afford either 15 movie nights or 8 restaurant meals. Assuming the family spends its entire budget on just these two goods, what is the opportunity cost of one movie night?
Answer:
The correct answer is 0.533 restaurant meals.
Explanation:
The two goods consumed by the family mentioned here are movie nights and restaurant meals.
The family can afford either 15 movie nights or 8 restaurant meals out of their total budget.
The opportunity cost of 15 movie nights = 8 restaurant meals
The opportunity cost of 1 movie night
= [tex]\frac{8}{15}[/tex]
= 0.533 restaurant meals
Final answer:
The opportunity cost of one movie night is approximately 0.53 restaurant meals. This is determined by dividing the total number of restaurant meals by the number of movie nights, illustrating the trade-offs between the two choices based on the budget constraint.
Explanation:
The opportunity cost of one movie night is the amount of restaurant meals forgone in order to attend one movie night. If a family can afford either 15 movie nights or 8 restaurant meals with their entire budget, we can calculate the opportunity cost by establishing a ratio. This calculation can help one understand the trade-offs and make more informed decisions on consumption.
To calculate the opportunity cost of one movie night, we use the following steps:
Find the ratio of restaurant meals to movie nights by dividing the number of restaurant meals by the number of movie nights, which is 8 restaurant meals / 15 movie nights.Simplify the ratio to find out how many restaurant meals you must give up for one movie night, which results in 0.53 restaurant meals per one movie night.Therefore, the opportunity cost of one movie night is approximately 0.53 restaurant meals. This indicates that for every movie night the family chooses to enjoy, they give up the opportunity to have slightly more than half of a restaurant meal. Understanding the opportunity cost helps the family make choices that align with their preferences and budget constraints.
At the time the transaction occurred, which of the following would result in an increase in net income under the accrual basis of accounting, but would not result in an increase in net income under cash basis accounting?
a. performance of services on account
b. receipt of cash for services that were performed earlier on account
c. use of supplies purchased earlier
d. purchase of supplies for cash
Answer: Performance of services on account
Explanation: Under the accrual basis of accounting the revenue from an activity is recorded when it is earned, that is, when the activity is completed. On the other hand, in cash basis of accounting the entry is recorded when cash is received.
So when the services are performed on account then the debtor will arise and the revenue is recorded if he organisation is following accrual basis.
On the other hand nothing will be recorded under cash basis since the cash is not received yet for the services performed.
Option a, 'performance of services on account' will increase net income under accrual basis accounting but not under cash basis accounting since the revenue is recognized when it is earned in the former method, irrespective of when the cash is received.
Explanation:The correct answer is a. performance of services on account. The accrual basis and cash basis are two different methods of accounting. With the accrual basis of accounting, revenues are recognized when they are earned (not necessarily when cash is received) and expenses are recognized when they are incurred (not necessarily when cash is paid out). Therefore, the performance of services on account can increase net income under the accrual basis of accounting because it has been earned, regardless of whether cash has been received or not. On the contrary, under a cash basis of accounting, revenues are only counted when cash is actually received and expenses are only counted when they are actually paid. Therefore, the performance of services on account would not increase net income under this method since no cash has been received.
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What are the differences between microeconomics and macroeconomics? HELP ASAP!
Answer:
The difference between micro and macro is that the macro is the study of the economy of a country, where inflation, employment, investments and GDP are analyzed.
Microeconomics is the study of the economy between people or between social groups, where the analysis of demand and supply is characterized
Explanation:
Palms, Inc. wants to sell enough palm trees to earn a profit of $20,000. If the unit sales price is $40, unit variable cost is $22, and total fixed costs are $120,400, how many trees must be sold to earn a profit of $20,000?
Answer:
7.800 trees.
Explanation:
The basic profict equation is Profit = sales - costs.
Profit = sales - (variable costs + fixed costs)
Profit + fixed costs = sales - variable costs
Profit + fixed costs = n° units * (unit selling price - unit variable costs)
In this case, the equation is:
Profit + fixed costs = n° units * (unit selling price - unit variable costs)
$20.000 + $120.400 = n° units * ($40 - $22)
$140.400 = n° units * $18
$140.400 / $18 = n° units
7.800 = n° units
Pack Company had the following data: Service Revenue $10,000 Cash $12,000 Accounts Receivable $3,000 Office Supplies $4,000 Rent Expense $2,000 Salaries Expense $1,200 Utilities Expense $800 Accounts Payable $3,200 What is the amount of total Assets to report on the Balance Sheet for Pack Company?
The total assets for Pack Company to report on the Balance Sheet is $19,000.
Explanation:The total assets can be calculated by summing the Cash, Accounts Receivable, and Office Supplies. In this case, the total assets would be $12,000 (Cash) + $3,000 (Accounts Receivable) + $4,000 (Office Supplies) = $19,000.
Meyer Media produced several screenplays that they turned into movies. Each screenplay they use has a copyright. In which section of the financial statements should they record these copyrights?
A. in the property, plant, and equipment section of the balance sheet
B. in the intangible assets section of the balance sheet
C. in the stockholders’ equity section of the balance sheet
D. in the expenses section of the income statement
Answer:
B. in the intangible assets section of the balance sheet
Explanation:
In the given question, the Meyer media produces several screenplays. By using each screenplay it has a copyright and we know that copyright is an intangible asset which comes under the intangible asset section under the asset side of the balance sheet.
And the intangible assets include patents, goodwill, trademark, etc.
The rest options are incorrect.
A group that sponsors bike helmet poster contests for children to promote bicycle safety is providing which of the following marketing offerings?
Services
Goods
Ideas
Innovations
Promotions
Answer: Ideas
Explanation: In the given case, the group is offering the service of ideas.The contest will make the participants to use their creativity and innovation. The contest arranged has no such rules and procedures specified so the participants can work with an open mind.
This strategy by group will have a dual effect, first it will increase the awareness and second it will give the group new ideas for the posters.
Hence from the above we can conclude that the correct option is C.
Consider the following statement: "The problem with economics is that it assumes that consumers and firms always make the correct decisions. But we know that everyone makes mistakes." What is the most correct response to this statement?a) Economics has a lot of problems such as those that caused the Great Recession.b) Economics assumes that consumers and firms are rational, not that they always make the right decisions.c) Economics is a proven field of study, and it has already solved this problem.d) Economics does assume that consumers and firms always make the correct decisions.
Answer:
The correct answer is b) Economics assumes that consumers and firms are rational, not that they always make the right decisions
Explanation:
The economy assumes that consumers and businesses operate in a unique and particular way, there are economic models that support circumstances under the term "perfect competition"; From a rational point of view, he believes that consumers act in a certain way, but some decisions are taken from an emotional perspective and leave rational analysis aside.
For example: For the economy, a vehicle has a limited period of use, when this period ends, the economy tells us that the consumer must purchase a new vehicle. But with an emotional perspective, there is a sentimental value on the part of the owner towards the vehicle, when the period of use has concluded, the owner prefers to repair the vehicle rather than buying a new one, no matters if it is more expensive and difficult than buying a new one.
So for the economy, the consumer of the last example, take the right decision?
On May 1, a two-year insurance policy was purchased for $9,600 with coverage to begin immediately. What is the amount of insurance expense that would appear on the company's income statement for the first year ended December 31?
Answer:
amount of insurance expense = $3200
Explanation:
given data
policy purchased = $9,600
to find out
What is the amount of insurance expense that would appear on the company's income
solution
we know insurance purchased on 1 may at $9600
and at statement 31st December is
time is may to December is = 8 month
so for 2 year insurance = 24 months
so
amount of insurance expense = [tex]\frac{9600}{24} 8[/tex]
amount of insurance expense = 400 × 8
amount of insurance expense = $3200
Final answer:
The amount of insurance expense that would appear on the company's income statement for the first year ended December 31st is $3,200. This was determined by prorating the $9,600 premium over 24 months and calculating the expense for the 8 months of coverage in the first year.
Explanation:
The question revolves around how to calculate the insurance expense to be reported on the company's income statement for the first year when a two-year insurance policy begins on May 1st. To determine this, you need to compute the portion of the $9,600 premium that applies to the first year of coverage, which involves pro-rating the premium over the coverage period.
The policy covers 24 months beginning May 1st. From May 1st to December 31st, there are 8 months of coverage in the first year. The monthly insurance cost can be calculated as $9,600 divided by 24 months, which equals $400 per month. Therefore, the insurance expense for the first year is 8 months times $400 per month, equating to $3,200.
This amount, $3,200, is the insurance expense that will appear on the company's income statement for the first year ended December 31st.
Clickz, an American photography magazine firm, has more than half of senior management positions held by women. African Americans represent 40 percent of the company's workforce. The description of Clickz's diversity refers to:____________
Answer:
surface-level diversity
Explanation:
Surface-level diversity is also known as bio-demographic diversity or social category diversity. It includes the observable individual differences which can be referred to the readily detectable attributes such as age, sex, ethnicity or marital status.
It is defined as characteristics which distinguish people and which can be noticed.
Thus, having 40 percent of workforce of the company as African Americans (ethnicity) and having more than half of the senior management positions held by the women (sex) are examples of surface-level diversity.
Within her company, Nadine utilizes a management style that varies according to the individual and environmental situation, with a strategy for minimizing errors by managing each stage of production. She has also set up a system with inputs, outputs, transformation processes, and feedback. Nadine’s management perspective is best described as: -classical -contemporary -quantitative -historical -behavioral
Answer:
contemporary
Explanation:
Contemporary management involves planning, leading, organizing and controlling operations to achieve organizational goals. Managers at each level of an organization are responsible for using resources effectively.
Hector has decided that he wants to open a business in which he sells garden and landscaping plants and provides classes on how to care for flowers and vegetables. Which form of business organization will Hector most likely choose when he initially opens his business?
Answer: Sole Proprietorship
Explanation: This is a form of a business organisation in which one person owns and controls the organisation. Also known as a sole trader, this is not a legal entity. There is no legal separation between the owner and the business itself. The person owns the business and is responsible for the debts incurred in the business. However this also means that the sole trader receives all the profits generated from the organisation.
Hector is thus the sole trader in this question. He will be personally liable for any debts incurred in the business, but he will also solely reap the benefits of the business, such as the profits earned. He can run the business under his own name, or create a fake name. But this will not separate his organisation from him.
Final answer:
Hector is most likely to choose a sole proprietorship when starting his business selling garden and landscaping plants and providing classes, due to the ease of management and complete control it offers.
Explanation:
Hector has decided that he wants to open a business selling garden and landscaping plants, and providing classes on how to care for flowers and vegetables. Given the description of his plans, the form of business organization Hector is most likely to choose when he initially opens his business is a sole proprietorship. This type of organization is well-suited for individuals starting a business by themselves, as it allows complete control over decision-making and is easy to establish. Hector would be able to manage the business, keep all of the profits, assume all the risks, and would not require special business taxes beyond paying income tax on the business earnings.
As Hector's business grows, he may consider other forms such as a partnership if he wishes to share responsibility and profits with other stakeholders, or he could evolve the business into a corporation for more complex operations and potential benefits like reduced personal liability and easier access to capital.
Hector's business involving garden and landscaping plants aligns with the principles of landscape horticulture and olericulture, deepening his engagement with the cultivation, marketing, and maintenance of plants. His expertise in these areas could greatly benefit his business and the educational aspect of his services.
The term "current financial resources" refers to: Multiple Choice Those assets that can quickly be converted into cash. Assets that are available to be used for current expenditures. The government's current assets and current liabilities. The current value of all net assets owned by the governmental unit. Financial resources used to provide electricity to local citizens.
Answer:
Assets that are available to be used for current expenditures.
Explanation:
Current financial resources, means those assets which can fulfill the current needs of a government, when we talk about such resources we only consider the assets available.
As in the chosen option, all the assets available for current expenditure that is assets available to meet current expenses of the government, that is current need, here by current we mean the need which will occur in few days,
We necessarily do not mean no capital expenditure, it is just about the timings of expenditure.
Therefore, Correct option is
Assets that are available to be used for current expenditures.
The correct option is "The current value of all net assets owned by the governmental unit.", as the term "current financial resources" refers to assets available for current expenditures of a governmental unit. This includes assets like cash and receivables, which can be utilized within a year. The focus is on maintaining transparency and meeting short-term financial obligations.
The term "current financial resources" refers to assets that are available to be used for current expenditures.
This means the resources that a governmental unit can use within a short period, typically within one year, to meet its financial obligations and operating expenditures. Examples include cash, receivables, and other assets that can be easily converted to cash or are expected to be used up in the short term.Governmental funds use a modified accrual basis of accounting, focusing on these expendable financial resources to meet current financial needs.This ensures transparency to taxpayers regarding how their government manages its financial responsibilities within the short term.Examples of Current Financial Resources:
Cash and cash equivalentsInvestments maturing within one yearAccounts receivables due within one yearPrepaid expenses expected to be used within one yearSuppose a restaurant in a small community offers breakfast options 24-hours a day, however, none of the competition even offers breakfast options. This would be an example of a(n) _____ benefit.
Answer: differential
Explanation: Differential benefit refers to the competitive advantage gained by an organisation due to their extra efforts or unique services etc.
Sometimes the firms enjoying differential benefit charge extra price from consumers and still operate efficiently.
In the given case, the restaurant is providing unique service of 24 hour breakfast option. This service will set apart that restaurant from others in the eye of customers.
Hence from the above we can conclude that the given case is an example of differential benefit.
Eskimo Pie Corporation markets a broad range of frozen treats, including its famous Eskimo Pie ice cream bars. The following items were taken from a recent income statement and balance sheet.
In each case, identify whether the item would appear on the balance sheet or income statement.
(a) Income tax expense
(b) Inventory
(c) Accounts payable
(d) Retained earnings
(e) Equipment earnings
(f) Sales revenue
(g) Cost of goods sold
(h) Common stock
(i) Accounts recieable
(j)Interest expense
Answer:
BALANCE SHEET:(b) Inventory
(c) Accounts payable
(d) Retained earnings
(h) Common stock
(i) Accounts receivable
2. INCOME STATEMENT:
(b) Inventory
(c) Accounts payable
(d) Retained earnings
(h) Common stock
(i) Accounts receivable
Explanation:
The balance sheet identifies the productive resources (assets) that a firm has for the development of its activities, as well as how they are financed. Those funds may come from creditors (Obligation with creditors - Liabilities) and owners (Issuing equity shares - Shareholders' equity).
Instead, The Income Statement shows the incomes and loss than the firm operation has produced during the accountable period. It starts with Revenues and Cost of Goods to get the Gross Net Profit and follows with others incomes and loss to get the Net Income of the period.
Indicate whether each of the following would be added to or deducted from net income in determining cash flow from operating activities by the indirect method:
a) Increase in prepaid expenses
b) Amortization of intangible assets
c) Increase in salaries payable
d) Gain on sale of fixed assets
e) Decrease in accounts receivable
f) Decrease in merchandise inventory
g) Depreciation of fixed assets
h) Decrease in accounts
Answer:
a) Increase in prepaid expenses are subtracted from net income
b) Amortization of intangible assets are added to net income
c) Increase in salaries payable are added to net income
d) Gain on sale of fixed assets are subtracted from net income
e) Decrease in accounts receivable are added to net income
f) Decrease in merchandise inventory are added to net income
g) Depreciation of fixed assets assets are added to net income
h) Decrease in accounts are subtracted from net income
Explanation:
The indirect method involves the adjustment of net income with changes in balance sheet accounts to arrive at the amount of cash generated by operating activities.
It depends on the account if it is added or subtracted to net income.
When money is used as a means of settling debts maturing in the future, it is serving as a A. store of value. B. standard of deferred payment. C. medium of exchange. D. unit of accounting.
Answer:
A would be the correct answer du
Explanation:
At the end of this section, the author provides links to self-assessments to help determine if an individual has what it takes to be an entrepreneur. He also refers to the "Miles Davis" test. Considering these, and the psychological and personal toll that entrepreneurs endure, would lead you to conclude that:
Answer:
The correct answer is entrepreneurs are born, not made.
Explanation:
Entrepreneurs, social psychologists and economic theorists have speculated on whether entrepreneurs are born or made, in other words, if you are predisposed to become an entrepreneur because of your genetic constitution, or if that provision comes from your environment, conditioning or other external factor.
For most entrepreneurs, it is comforting to think that business men and women are made, that even if they lack the "right" DNA, practice, experience and sufficient conditioning to be a success.
You're an entrepreneur and had a great idea to sell shoes that have springs installed in them to make walking easier. However, the development costs were so high that the shoes are priced 15 times higher than shoes without springs. As a result, many of the shoes have gone unsold. What possible event could eliminate the disequilibrium in the market for shoes?
A. A study reveals that shoes with a spring can increase the chance of a broken leg.
B. There is an increase in income and "spring shoes" are a normal good.
C. There is an increase in income and "spring shoes" are an inferior good.
D. There is a decrease in the price of rubber, which is an input in the production of shoes.
B. There is an increase in income and "spring shoes" are a normal good.
Answer:
B. There is an increase in income and "spring shoes" are a normal good.
Explanation:
To eliminate the disequilibrium in the market for shoes, spring shoes firstly needs to be seen as a normal product because if it is seen an inferior product then as people's Income rises they woudnt want to buy inferior products because they have the income to buy normal products. As people income rises, since spring shoes is seen as a normal product, then people will buy springshoes
A bond with a $1,000 par value sells for $895. The coupon rate is 7%, the bonds mature in 20 years, and coupon interest is paid semi-annually. The tax rate is 35%. What is the aftertax cost of this debt?
Answer:
After tax cost of debt is 5.239%
Explanation:
Given:
Face value = $1,000
Bond price = $895
Coupon payments = 0.035×1,000 = $35 (coupon payment is paid semi-annually so 7% is divided by 2)
Maturity = 20×2 = 40 periods
Using bond price formula:
Bond price = Present value of face value + present value of coupon payments
Use excel function =RATE(nper,pmt,PV,FV) to calculate cost of debt.
substituting the values:
=RATE(40,35,-895,1000)
we get Pre-Tax cost of debt = 4.03% semi- annual
Annual rate is 4.03%×2 = 8.06%
Note: PV is negative as bond price is cash outflow.
After tax cost of debt = 8.06(1 - 0.35)
= 5.239%
If a business is earning an economic profit in a competitive market, it is a. price gouging its customers. b. exploiting it workers. c. producing goods and services that are valued more highly than the resources required to produce them. d. producing goods and services in a market that is characterized by high entry barriers.
Answer:
The correct answer is option c.
Explanation:
If a business is producing at the point where the value or price of its goods and services are higher than the value or price of resources used in it, then the firm will be having profits.
This is because if the input price is lower than the price of product then the cost of production will be lower than the revenue earned. So the business will earn a profit.
If a business is earning an economic profit in a competitive market, it means that it is producing goods and services that are valued more highly than the resources required to produce them.
Explanation:In a competitive market, if a business is earning an economic profit, it means that it is producing goods and services that are valued more highly than the resources required to produce them. This indicates that the business is able to generate revenue that exceeds its costs and is resulting in overall profitability. It does not imply price gouging, worker exploitation, or high entry barriers.
Valencia Corp. has permanent productive capacity devoted to the production of goods and services to be marketed in Asian markets. In addition to this, the primary focus of operations and production is to service domestic market needs in the United States. In the context of international marketing involvement, Valencia Corp. is most likely at the _____.
A) internal marketing stage.
B) global marketing stage.
C) domestic marketing stage.
D) no direct foreign marketing stage.
E) regular foreign marketing stage.
Answer:
E) regular foreign marketing stage.
Explanation:
Regular foreign marketing stage -
At this stage , the firm has the capacity for permanent productivity for the production of goods for marketing in the foreign markets .
In this stage , the firm employs domestic and foreign overseas intermediaries to import in the market .
The main goal of the production and operations is to fulfill the needs of the domestic needs .
But as the demand overseas grows , production get allocated for the foreign markets .
Hence , from the information , the correct option is E) regular foreign marketing stage .
Which of the following is one of the key areas that is addressed by operations design choices? Select one:
a. Quality control and mass customization
b. Functional plans and control systems
c. Value chain integration and outsourcing
d. Learning and innovation systems
Answer: Option C
Explanation: Operation design refers to the building a framework for the various operation to be performed by the organisation. It helps to build the management to make systematic work line so that everyone could perform their activities efficiently.
The operations design covers the area if the company should use external help for performing their back end jobs or if they should use collaboration from other participants in markets to increase the value of their product in the eyes of customers.
Hence, from the above we can conclude that the correct option is C.
A recent New York Times article about Bernard Madoff and his illegal Ponzi scheme stated, "When money goes global, fraud does too." Although the goal of investors who trusted Madoff's investment company was to earn the highest return possible on their investments, they turned a blind-eye toward the fact that some of those returns were too good to be true. Individual investors, companies, and even charities lost large sums of money by investing with Madoff's company. Which of the following statements relates to this story?
A. The unethical behavior of one company had a worldwide ripple effect that can impact the well being of an economy.
B. Too much regulation caused the capitalistic nature of Mr. Madoff's business model to fail.
C. People lost money because of the fluctuations in world trading currencies, questioning the legitimacy of trading abroad.
D. Investors did not sign contracts with Mr. Madoff's company. The government can only protect individuals and companies who sign enforceable contracts.
Answer:
The answer is A) The unethical behavior of one company had a worldwide ripple effect that can impact the well being of an economy.
Explanation:
Bernard (Bernie) Madoff was a very respectable business man, market guru, top investor on Wall Street, president of Nasdaq, etc. With such a resume it was easy for him to attract billions of dollars from around the world into his Ponzi scheme fraud. He committed the largest fraud in history, over 64,800 millions of US dollars.
He would offer well above average returns to investors and greed made his clients fall into his trap. This whole fraud was so big it affected many people around the world.