Business Structures — Unit test Answers

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1
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t
to reduce the number of responsibilities
t
to make it easier to raise funds for expansion
t
to move into a more favorable tax bracket.
t
to take advantage of little government oversight.
2
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What part does interest play in deficit spending?

A
Governments must pay interest on money they borrow when they take on debt.
B
Citizens must pay interest when their governments borrow money.
C
Governments may charge foreign countries interest when they borrow money.
D
Interest is not a factor when a government’s budget is in deficit.
3

Which of these are goals of an expansionary policy? Check all that apply.increased available creditdecreased available creditincreased money supplyincreased inflationincreased interest ratesdecreased interest rates

A
increased available credit
B
decreased available credit
C
increased money supply
D
increased inflation
E
increased interest rates
F
decreased interest rates
5

Spending that can change from year to year is known as

A
discretionary spending.
B
deficit spending.
C
mandatory spending.
D
expansionary spending.
7

Which body manages the Fed?

t
the Appropriations Committee
t
the Federal Reserve Board
t
the Federal Open Markets Committee
t
the Economic Policy Subcommittee
8

most likely

c
cooperatives give majority owners the most control, while franchises make decisions with a parent company.
c
cooperatives make it easy to accumulate supplies, while franchises come with supplier relationships already in place.
c
cooperatives are well financed by members, while franchises must raise large sums of money to launch a business.
c
cooperatives allow all owners to share profits, while franchises are required to share profits with a parent company.
10

Expansionary spending takes place when a government makes the decision to

p
put a freeze on the number of its employees.
r
raise taxes to balance its budget.
r
raise taxes to run a budget surplus.
r
raise spending to stimulate the economy.
11

Globalization is the process of

l
limiting exhange of goods and services.
c
connecting the world over time.
r
requiring or relying on something.
f
focusing on certain goods and services.
13

The diagram shows different types of policies.

Question illustration
T
The Best Economic Policies
G
Government Economic Policies
I
Ineffective Economic Policies
T
The Free Enterprise System
14

Why might a country choose to devalue its currency?

A
to please its trading partners
B
to encourage exports
C
to encourage imports
D
to reduce taxes

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Business Structures — Unit test Answers — 26-27…