Chapter 6

Question 1

A corporation is owned by whom?

Answer 1

Stockholders

Question 2

Which one of these would not constitute an investment? A. Someone who buys 100 shares of Exxon mobile B. Exxon mobile purchases 20 new oil Riggs C. General Motors builds a new assembly plant D. Macy’s remodels it stores

Answer 2

Hey someone who buys 100 shares of Exxon mobile

Question 3

To build up our capital we need to?

Answer 3

Save more and consume less

Question 4

Investments will tend to be low when what?

Answer 4

Capacity utilization rate is low in the interest rate is high

Question 5

Which of these is not an investment? A. Additional inventory B. The building of the country courthouse C. The building of the shopping mall D. The building of an automobile assembly line

Answer 5

B. the building of a county courthouse

Question 6

A __________is a legal person.

Answer 6

Corporation

Question 7

A key disadvantage of incorporating is

Answer 7

You will have to pay corporation income tax.

Question 8

Inventory investment

Answer 8

Can either be positive or negative

Question 9

Gross investment

Answer 9

Minus depreciation equals net investment.

Question 10

During bad recessions, investment in plant and equipment will

Answer 10

Fall somewhat

Question 11

Our capacity utilization rate is usually between

Answer 11

70 and 90

Question 12

The expectation rate of profit is found by

Answer 12

Dividing expected profits by many invested

Question 13

True or false only stockholders are owners of the corporation.

Answer 13

True

Question 14

Since 1980 inventory investments has

Answer 14

Been both positive and negative

Question 15

The largest sector of the gross investment is?

Answer 15

Plant and equipment

Question 16

The least stable sector of the GDP is

Answer 16

I

Question 17

The only time to invest is when the expected rate of profit is _________the interest rate.

Answer 17

Greater than

Question 18

Benedict Arnold corporations are loyal to who?

Answer 18

The profits of their stockholders

Question 19

Investment includes

Answer 19

An increase in business inventories.

Question 20

What is the largest component of the gross private domestic investment in the United States?

Answer 20

Purchases of producer plants and durable equipment

Question 21

True or false. Internal Revenue Service has disallowed the formation of limited liability corporation which have the legal installation of the corporation and the preferred tax treatment of the limited partnership.

Answer 21

False

Question 22

A soul proprietorship is what?

Answer 22

Is simply and an individual in business for himself or herself

Question 23

Which one is not an investment? A. Mr. Riddick buys a new home B. Mr. Randall Hopper purchases 500 shares of Dupont C.missed your call man adds a new wing to his factory D. The brewery purchases 100 new cars

Answer 23

B.

Question 24

A business person would most likely invest ifSpace the expected profit rates were _______ and the interest rates were ________percentage.

Answer 24

20 and 14

Question 25

Most business firms in United States are?

Answer 25

Proprietorships