Economics Principles and Practices © 2012

Chapter 3: Business Organizations

Self-Check Quizzes

1
A corporation's written promise to repay borrowed money at a later date is a _______.
A)bond
B)stock certificate
C)partnership agreement
D)charter
2
When the owner of a business is personally and fully responsible for all losses and debts of the business, it is known as _____________.
A)bankruptcy
B)limited life
C)unlimited liability
D)unlimited partnership
3
An major advantage or a corporation is _______.
A)limited life and unlimited liability
B)the ease of raising financial capital
C)federal and state tax breaks
D)the fact that owners share equally in profits and losses
4
The sum of net income and non-cash charges for a business is called _______.
A)cash flow
B)revenues
C)depreciation
D)taxes
5
Two grocery chains might wish to merge for all of the following reasons EXCEPT
A)to increase outlets and improve efficiency.
B)to reduce the number of competitors.
C)to create a new corporate identity.
D)to diversify corporate holdings.
6
The saying "don't put all your eggs in one basket" is related to which of the following?
A)specialization
B)diversification
C)standardization
D)nationalization
7
Host countries welcome multinationals because they _____.
A)produce tax revenues
B)pay low wages
C)export scarce resources
D)interfere with local businesses
8
A successful consumer cooperative offers its members ______.
A)loans at better rates than commercial loan companies
B)help in selling their products directly to consumers
C)representation in various employment matters
D)products at lower prices than regular businesses charge
9
The Tennessee Valley Authority (TVA) is a government agency that _______.
A)insures deposits in our nation's banks
B)provides fire protection and rescue services
C)supplies electrical power for much of the South
D)provides money and guidelines for schools
10
A government corporation like the U.S. Postal Service differs from a regular government agency because the corporation _________.
A)uses assets provided by private businesses
B)hires professional managers to oversee operations
C)competes directly with private businesses
D)covers its losses with funds supplied by Congress
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