Question

A business practice that is not sustainable and involves the exchange of money simply for recruiting people to participate in a multi-level selling business without the benefits of sales is a(n):______

Answer 1

The correct answer is: Pyramid Scheme.

Step-by-step explanation:

The Pyramid Scheme refers to the type of business that revenues from recruiting several individuals. Recruited people pay a sort of fee for being part of the network who are supposed to provide recruits a place in the pyramid scheme so later on they can also benefit from the fees of other people recruited. This type of organization tends to be unsustainable.

The structure is similar to the managed by Multi-Level Marketing operations (MLMs) but MLMs actually provide recruits an asset they can and should sell to benefit from the gains.