Business- Exam 20 Questions and
Answers
How do businesses affect communities? - correct answer-Businesses affect
communities by putting money into them. Taxes that businesses pay stay in the
community and therefore benefit the little economy.
Explain the difference between entrepreneurial resources and labor resources. - correct
answer-Entrepreneurial resources are things like capital lines of credit, financing. On the
other hand, labor resources are the resources of available manpower.
What are five ways to measure a nation's economic activity? - correct answer-Gross
Domestic Product
Gross National Product
Net National Product
Capital Consumption
Net Material Product
What are the four stages of the business cycle? - correct answer-Introduction
Growth
Maturity
Decline
Why does unemployment increase during a recession? - correct answer-A recession is
when there is a temporary economic decline. In a recession, unemployment increases
because people lose their jobs or get laid off. Trade and industry is reduced.
Why is it easier for partnerships to obtain capital than it is for sole proprietorship? -
correct answer-In a partnership, there are more people involved. If there are more
people are borrowing money, then the risk lays on all of the people. In a sole
proprietorship, there is only one person. The more people, the less the risk.
What is the major advantage of a corporation? Why is this an advantage? - correct
answer-The major advantage of a corporation is limited liability for the owners and
better access to markets for financial capital. Because of the structure of a corporation,
there is less risk for an individual because they are separated from their business and
therefore do not have to deal with all risks. Owners are shareholders. Since they only
own part of the company, they have limited liability. Also, a corporation is not dissolved
when an owner dies.
Answers
How do businesses affect communities? - correct answer-Businesses affect
communities by putting money into them. Taxes that businesses pay stay in the
community and therefore benefit the little economy.
Explain the difference between entrepreneurial resources and labor resources. - correct
answer-Entrepreneurial resources are things like capital lines of credit, financing. On the
other hand, labor resources are the resources of available manpower.
What are five ways to measure a nation's economic activity? - correct answer-Gross
Domestic Product
Gross National Product
Net National Product
Capital Consumption
Net Material Product
What are the four stages of the business cycle? - correct answer-Introduction
Growth
Maturity
Decline
Why does unemployment increase during a recession? - correct answer-A recession is
when there is a temporary economic decline. In a recession, unemployment increases
because people lose their jobs or get laid off. Trade and industry is reduced.
Why is it easier for partnerships to obtain capital than it is for sole proprietorship? -
correct answer-In a partnership, there are more people involved. If there are more
people are borrowing money, then the risk lays on all of the people. In a sole
proprietorship, there is only one person. The more people, the less the risk.
What is the major advantage of a corporation? Why is this an advantage? - correct
answer-The major advantage of a corporation is limited liability for the owners and
better access to markets for financial capital. Because of the structure of a corporation,
there is less risk for an individual because they are separated from their business and
therefore do not have to deal with all risks. Owners are shareholders. Since they only
own part of the company, they have limited liability. Also, a corporation is not dissolved
when an owner dies.
