Correct Response: A. The main function of entrepreneurs in capitalist economies is to combine the factors of production (i.e., land, labor, and capital) in productive ways to create new goods or services. Given the innovative nature of entrepreneurial activity, it is just as likely to disrupt a given industry as it is to maintain stability (B). Although entrepreneurs may have occasion to interact with different sectors of the economy, coordinating relations among them (C) is not one of their functions. In modern capitalist economies, the fiscal and monetary policies of government, rather than the actions of individual enterprises, are primarily responsible for moderating fluctuations in the business cycle (D).
