What is the fundamental flaw in a pyramid and/or ponzi scheme that make them form of fraud?

Correct answer is "a. It requires a constant exponencial expansion of new investment topay existing obligation, which cannot continue, and therefore the promise of earnings is fraudulent."

A pyramid scheme is one in which a certain amount of money is demanded from new investors and then is applied to cover previous liabilities from other investors instead of being invested in productive income generating activities.

The system needs a constantly growing base of new  entrants to keep itself working and, as the number of people who can enter such arrangement is limited, it eventually becomes unsustainable.

true

explanation:

the foundation of greek city-states: following the fall of the mycenaean civilization in the 10th century bc, the area surrounding the empire went through its own mini dark ages. answer and explanation