Economics Chapter 04

Question 1

Corporations have an easier time borrowing money for long periods of time than do partnerships.

Accepted Answer

True

Question 2

The newest form of business corporation is the

Accepted Answer

limited liability corporation (LLC)

Question 3

No one can become a member of an LLC without the consent of a majority of the membership.

Accepted Answer

True

Question 4

Which of the following is not an advantage of a partnership?

Accepted Answer

very difficult to organize (like sole proprietorships)

Question 5

Corporations account for 87% of the business generated in the United States today.

Accepted Answer

True

Question 6

The PA Turnpike and the US Postal Service are examples of government-owned corporations.

Accepted Answer

True

Question 7

The LLC is the fastest-growing form of small business ownership in the United States today.

Accepted Answer

True

Question 8

Shareholders are entitled to one vote for every share of stock they own.

Accepted Answer

True

Question 9

The board of directors of a corporation

Accepted Answer

all of these

Question 10

Unlike a corporation, the LLC itself has no income tax liability.

Accepted Answer

True

Question 11

The most important advantage of the corporation is its limited liability.

Accepted Answer

True

Question 12

Written authorizations by a shareholder giving someone else the right to vote their shares is

Accepted Answer

a proxy

Question 13

Giant corporations and small corporations have similar organizational problems.

Accepted Answer

False

Question 14

An LLC cannot sue or be sued or hold property in its name.

Accepted Answer

False

Question 15

Owners of S-corporations enjoy all the advantage of corporations while avoding double taxation.

Accepted Answer

True

Question 16

A corporation's license is called a

Accepted Answer

charter

Question 17

Anyone holding one or more shares of stock is a part owner of a corporation.

Accepted Answer

True

Question 18

The most important advantage of the corporation is its limited liability.

Accepted Answer

True

Question 19

Govt. owned corps usually develop because private interests are

Accepted Answer

both of these

Question 20

A retail business owned by some or all of its customers is called a

Accepted Answer

consumer cooperative

Question 21

Only a handful of stockholders own enough shares to be able to influence corporate policies in

Accepted Answer

giant corporations

Question 22

Most stockholders are very willing to become involved in the details of a corporation.

Accepted Answer

False

Question 23

A corporation organized for purposes other than to earn a profit is called a

Accepted Answer

not-for-profit corporation

Question 24

Shareholders are liable for the debts of the corporation.

Accepted Answer

False

Question 25

If a corporation fails, stockholders can lose everything they own,

Accepted Answer

False

Question 26

Like any other income, dividends are subject to personal income taxes.

Accepted Answer

True

Question 27

Many people argue that the "double taxation" imposed on corporations is unfair.

Accepted Answer

True

Question 28

It is much easier to interest people to invest in a partnership than in a corporation.

Accepted Answer

False

Question 29

Corporations owned and operated by governments are called

Accepted Answer

government-owned corporations

Question 30

The largest corporations play the most important role in the American economy.

Accepted Answer

True

Question 31

A unique feature of the corporation is its separation from the people who own it.

Accepted Answer

True

Question 32

Certificates representing ownership in a corporation are called

Accepted Answer

shares of stock

Question 33

Which of the following is true about the officers of a corporation?

Accepted Answer

all of these

Question 34

Most stockholders do not know or care to know how the business functions.

Accepted Answer

True

Question 35

Privatization in some communities has led to the establishment of privately owned

Accepted Answer

both of these

Question 36

Which of the following is a disadvantage of a sole proprietorship?

Accepted Answer

all of these

Question 37

Boards of directors set long-range goals and run the daily operations of the corporation.

Accepted Answer

False

Question 38

The people who run a corporation are called

Accepted Answer

officers

Question 39

In the 1930s, the federal and state governments went into the

Accepted Answer

electric business

Question 40

Double taxation is the major disadvantage of corporations, except for the S-corporation.

Accepted Answer

True

Question 41

An unincorporated business owned by two or more people is called a

Accepted Answer

partnership

Question 42

An organization of producers who cooperate in buying supplies and equipment and marketing are

Accepted Answer

producer cooperatives

Question 43

To sell shares in a corporation, all one needs to do is find a buyer for those shares.

Accepted Answer

True

Question 44

One with less than 50% of the stock of a corporation cannot gain control of the corporation.

Accepted Answer

False

Question 45

In giant corporations, control lies with those able to select the board of directors.

Accepted Answer

True

Question 46

The people who are elected by the shareholders of a corp to oversee its operation are the

Accepted Answer

board of directors

Question 47

Associations of individuals or organizations who band together to sell more efficiently are

Accepted Answer

cooperatives

Question 48

Which of the following is a main area of concern of boards of directors of corporations?

Accepted Answer

both of these

Question 49

LLCs may end with the death or withdrawal of one of its members.

Accepted Answer

True

Question 50

Which of the following is not a disadvantage of a partnership?

Accepted Answer

unlimited life

Question 51

LLC members are personally liable for the debts of the business.

Accepted Answer

False

Question 52

LLCs are easier to form than corporations and their income isn't subject to double taxation.

Accepted Answer

True

Question 53

A business organization licensed to operate by a state or the federal government is called a

Accepted Answer

corporation

Question 54

Those who own shares of stock in a corporation are called

Accepted Answer

both of these

Question 55

Management can remain in power indefinitely as long as it can control 50% of the votes cast.

Accepted Answer

True

Question 56

Corporations are often described as "artificial persons."

Accepted Answer

True

Question 57

Corporations are not allowed to enter into contracts, pay taxes, or sue/be sued.

Accepted Answer

False

Question 58

The Tennessee Valley Authority is one of the oldest and best-known government corporation.

Accepted Answer

True

Question 59

Organizing and operating a corporation is a very easy process.

Accepted Answer

False

Question 60

An unincorporated business owned by one person is called a

Accepted Answer

sole proprietorship

Question 61

To buy into a corporation, all one needs to do is find someone with stock to sell.

Accepted Answer

True

Question 62

Both the S-corp and the LLC combine advantages of the partership with those of the corporation.

Accepted Answer

True

Question 63

An apt building run by a corp whose capital stock is owned by its tenants is called a

Accepted Answer

cooperative apartment building

Question 64

Most people investing in large corporations will not turn over control of their investment.

Accepted Answer

False

Economics Chapter 04

Questions 75

Economics Chapter 04

Questions 75