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Flashcards in Chapter 6 Deck (25)
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1
Q

A corporation is owned by whom?

A

Stockholders

2
Q

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

A

Hey someone who buys 100 shares of Exxon mobile

3
Q

To build up our capital we need to?

A

Save more and consume less

4
Q

Investments will tend to be low when what?

A

Capacity utilization rate is low in the interest rate is high

5
Q

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

A

B. the building of a county courthouse

6
Q

A __________is a legal person.

A

Corporation

7
Q

A key disadvantage of incorporating is

A

You will have to pay corporation income tax.

8
Q

Inventory investment

A

Can either be positive or negative

9
Q

Gross investment

A

Minus depreciation equals net investment.

10
Q

During bad recessions, investment in plant and equipment will

A

Fall somewhat

11
Q

Our capacity utilization rate is usually between

A

70 and 90

12
Q

The expectation rate of profit is found by

A

Dividing expected profits by many invested

13
Q

True or false only stockholders are owners of the corporation.

A

True

14
Q

Since 1980 inventory investments has

A

Been both positive and negative

15
Q

The largest sector of the gross investment is?

A

Plant and equipment

16
Q

The least stable sector of the GDP is

A

I

17
Q

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

A

Greater than

18
Q

Benedict Arnold corporations are loyal to who?

A

The profits of their stockholders

19
Q

Investment includes

A

An increase in business inventories.

20
Q

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

A

Purchases of producer plants and durable equipment

21
Q

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.

A

False

22
Q

A soul proprietorship is what?

A

Is simply and an individual in business for himself or herself

23
Q

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

A

B.

24
Q

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

A

20 and 14

25
Q

Most business firms in United States are?

A

Proprietorships