Question

It can be inferred that the author makes which of the following assumptions about the businesses once controlled by individual capitalists?

• A. These businesses were less profitable than are businesses today.
• B. Improving long-term productivity led to increased profits.
• C. Each business had only a few stockholders.
• D. There was no short-term trading in the stock of these businesses.

Answer 1

The correct option is B Improving long-term productivity led to increased profits.

The best answer is (B).
The lines in the passage says "United States productivity is unlikely to improve unless shareholders and the managers of the companies in which they invest are encouraged to enhancelong-term productivity (and hence long-term profitability),rather than simply to maximize short term profits."
The remaining options need not be assumed necessarily.