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Entrepreneurship — Unit test Answers

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21
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How do corporations raise money and resources to expand? Select THREE answers.

A
They request a bank loan.
B
They raise franchise fees.
C
They cash in dividends.
D
They agree to sell stocks.
E
They issue bonds.
22
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What is the most likely reason why many of the New York Factory Investigating Commission’s suggestions were not implemented immediately?

A
The public did not support new safety regulations until several factory disasters occurred.
B
Many of the suggested changes would have negatively affected the quality of products made in factories.
C
Most workers outside New York would not have benefited from widespread factory reform.
D
Factory owners resisted the suggestions because they would be costly to implement.
23

A government might enact expansionary spending when it is trying to

A
increase aggregate demand for goods.
B
decrease aggregate demand for goods.
C
slow an economic expansion.
D
lower a budget deficit.
24

A new business should be based on an entrepreneur's individual interests because the entrepreneur must

A
have sufficient confidence to succeed.
B
be willing to take personal responsibility.
C
have enough determination to work alone.
D
dedicate as many hours as needed to the work.
25

Which characteristic of being an entrepreneur could be seen as both a benefit and a drawback?

A
job security.
B
personal fulfillment.
C
financial risk.
D
a flexible working environment.
26

What happens to earnings in a cooperative?

A
They are used to pay middlemen for services.
B
They are shared with member owners.
C
They are used to buy more stock for members.
D
They are shared with customers through dividends.
27

The main advantage that corporations have is

A
limiting liability for owners and stockholders.
B
giving many owners a say in business decisions.
C
being inexpensive and easy to establish.
D
requiring fewer state and federal regulations.
28

How are Bill Gates and Henry Ford similar? Check all that apply.

A
They both streamlined factory production.
B
They both became wealthy and successful.
C
They both helped better the lifestyles of others.
D
They both developed products that filled a human need or needs.
E
They both founded a company when they were very young.
29

A disadvantage of forming a partnership is that owners

A
can find it tougher to start and stop a business.
B
can find it more difficult to get a bank loan.
C
are only responsible for their own finances.
D
are fully responsible for their partners' losses.
30

Read the excerpt from a letter about the early trade union movement.The trade union movement came into being as a movement of hunger. It was made necessary by conditions. It was in the beginning formed in response to a hunger for enough to eat . . . As it became possible to secure more food, other hungers demanded satisfaction . . . The demands were for more and better food, for better clothes and for better homes. It required a struggle to satisfy these needs . . . [A]t every step of the way it was necessary to overcome the stubborn opposition of employers who were resolved not to recede and not to relinquish any of the powers and privileges which they possessed.—Samuel Gompers, 1920

A
They struggle just as workers do.
B
They earned their privileges.
C
They are greedy and selfish.
D
They are stubborn but hardworking.
31

Milton Friedman argued that consumers are more likely to alter their behavior based on

A
changes in the unemployment rate.
B
short-term changes in the economy.
C
long-term changes in the economy.
D
changes in the inflation rate.
32

An entrepreneur who opens a franchise must

A
assume debts.
B
keep profits.
C
offer training.
D
select sites.
33

[BLANK]

A
risk
B
laws
C
monopolies
D
safety
34

Why did Friedrich Hayek call expansionary spending dangerous?

A
He felt it could lower the money supply and cause deflation.
B
He felt it could lead to inflation and poor decisions by consumers.
C
He felt it could lead to deflation and poor decisions by consumers.
D
He felt it could lower available credit and cause a drop in prices.
35

Entrepreneurs who want to open a franchise

A
buys the rights from the parent company and creates his or her own rules.
B
buy the rights from the parent company and invest in a location approved by the parent company.
C
invest in a location and create a business model for the franchise.
D
invest in a location and develop a trademark for the franchise.
36

What must an entrepreneur assume when starting a business?

A
that the correct location guarantees success
B
that every product has a customer who wants it
C
that clever market strategies may still fail to sell a product
D
that raising funds is the most difficult step in starting a business
37

The chart shows a cost-benefit analysis.

Question illustration
A
The EPA legislates and enforces more regulations that reap greater benefits than the other agencies.
B
The EPA legislates and enforces food regulations that reap greater benefits than the other agencies.
C
The EPA has a larger budget than the other agencies, and its employees work longer hours.
D
The EPA is less efficient than the other agencies, and its employees spend more money.
38

What is one benefit for US workers who have a college degree rather than a high school diploma?

A
More than 80 percent of jobs require a college degree.
B
Those with a college degree report higher job satisfaction.
C
Most workers with a college degree are immune to layoffs.
D
Those with a college degree earn nearly twice as much as those without college.
39

The graph shows how individuals affect economic growth.

Question illustration
A
They work in their own self-interest.
B
They work as part of a unified group.
C
They work to influence the money supply.
D
They work to influence the economy.
40

The most common business organizations in the United States are

A
partnerships.
B
sole proprietorships.
C
corporations.
D
franchises.

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