The purpose of separating management from ownership is to________________?
Correct answer: B. ensure that the long-term interests of the corporation outweigh short-term gains
- A. secure the highest possible salaries for managers
- B. ensure that the long-term interests of the corporation outweigh short-term gains
- C. shield absentee owners from any and all responsibility
- D. shield the board of directors from any and all responsibility
Explanation
Separating ownership from management permits professional managers to run the firm while directors represent shareholders, with the aim of protecting the corporation's long-term interests. It does not remove managers' responsibility or guarantee them higher salaries.
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Individual consumers, firms and markets are examined through demand and supply, elasticity, consumer choice, production, costs, revenue and the determination of prices and output. The topic also covers market structures such as perfect competition, monopoly and oligopoly, plus market failure, externalities and the distinction between microeconomic decisions and economy-wide outcomes.
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