Unit 3: Economics Final Exam Review

Question 1

Interest

Answer 1

The cost of borrowing money.

Question 2

Stock

Answer 2

A share of stock is a piece of ownership in a coperation.

Question 3

Bonds

Answer 3

Loans by people to the government or a business.

Question 4

Mutual funds

Answer 4

Bundles of stocks and bonds are managed by a brokerage. These are used for retirement and vary in risk/return.

Question 5

Entrepreneur

Answer 5

A person that starts from scratch by borrowing money to start a business.

Question 6

Sole Proprietor

Answer 6

Managed by 1 person. They earn all profits, have easy start-up, and limited growth potential. Ex: personal trainer, bakery owner.

Question 7

Partnership

Answer 7

Ran/owned by 2 people. They share the profits, and increased growth potential. Ex: law firms, accounting firms.

Question 8

Corporation

Answer 8

Owned by shareholders that purchase the stock of the company, growth potential. Ex: McDonald’s.

Question 9

Liability

Question 10

Credit

Question 11

Credit rating

Question 12

Building your credit

Question 13

Human capital