The theory of hegemonic stability holds the assumption that the world system is most prosperous when there is a hegemon to organize the international political and economic system. Historically, the periods of the Dutch (162072), British (1815-73), and United States (post1945) hegemony are commonly cited as evidence of the link between hegemony and prosperity (Kindleberger, 1977, 1981). When hegemony breaks down, it is assumed, the international system falls into disorder, with the resulting decline in peace and prosperity (Keohane, 1981). As also understood from the information given the correct answer is A. “The world system is most prosperous when there is a hegemon to organize the international political and economic system.” and “When hegemony breaks down, it is assumed, the international system falls into disorder, with the resulting decline in peace and prosperity.” are the assumptions which the theory ofhegemonic stability holds. However, some scholars argue that hegemony is a self-defeating and hence, temporary condition. While the hegemonic state bears the burdens of organizing the international system and supplying public goods, free-rider states prosper and increase the burdens on the hegemon. At some point, the hegemon comes to the conclusion that it is unable to bear the costs of the system it has created. So either it begins to put domestic interests over its international obligations or it becomes too weak to realize its widespread commitments. The Great Britain’s decline in the late 19th and early 20th century can be cited as an example of that (www. pugetsound.edu/what-is-ipe).