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.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Microeconomics
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.
Practise Microeconomics
1,742 free Microeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Microeconomics questions
The most numerous forms of business ownership in the United States is the________________?
Property is defined in terms of rights of_________________?
Economists chart the limits of resources and technology on output through_____________________?
Who really owns the corporation? the_________________?
Another way of talking about opportunity costs might be as________________?
To use up the final products of production is to_______________?