Final answer:
The correct word pair is 'legal; economic,' as a parent company and its subsidiaries are recognized as separate legal entities but function collectively as a single economic entity.
Step-by-step explanation:
The word pair that fills in the blanks correctly is: A parent company and its subsidiaries are separate legal entities but one economic entity. Therefore, the correct answer is 3. legal; economic. Corporations are formed under legal statues and are considered separate from the individuals who own, manage, or are employed by the business. This separation allows individuals to engage in business practices without bearing the full legal consequences of the corporation's actions.
The shareholders own the corporation, but it is through this ownership structure that corporations gain their distinction as unique legal entities. The economic entity principle separates the financial transactions of a company and its owners, but limited liability is a legal stance that prevents the owner from being held liable for the company's debts and losses.