FM 116 Final Exam Study Questions with Correct Answers
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Course
FM 116
Institution
FM 116
Stockholders are ___ of a corporation. Common stockholders have the right to vote on issues affecting the operation of the business. owners
In a business, ___ is equal to sales minus expenses. profit
A(n) ___ occurs when one firm buys another firm. acquisition
Audrey is thinking about starting s...
FM 116 Final Exam Study Questions with
Correct Answers
Stockholders are ___ of a corporation. Common stockholders have the right to vote on
issues affecting the operation of the business. ✅owners
In a business, ___ is equal to sales minus expenses. ✅profit
A(n) ___ occurs when one firm buys another firm. ✅acquisition
Audrey is thinking about starting small business and is trying to assess the potential
opportunities and threats associated with a new start-up. Which statement of advise
would be the most helpful to Audrey? ✅find a niche market segment that you can
profitably operate in but which is too small to attract larger companies
Which of the following provides resources to first time entrepreneurs to help them
develop a business plan? ✅small business administration
___ measures the total value of all final goods and services produced within a nation's
borders over a given period of time. ✅gross domestic product
___ provides information to businesses about where people live and their traits, such as
race, gender, age, income, and education. ✅demographics
The demand curve shows the relationship between the: ✅price and quantity from a
customer demand standpoint
After finishing college, Dana wants to open her own business. As a fine arts student,
she is planning to provide services as a graphic artist. She wants the freedom to be her
own boss and doesn't want to deal with a lot of rules and regulations. But she is nervous
about risking her personal wealth. She is thinking about forming a sole proprietorship
and asks you for your opinion about this form of business. Which of the following
statements is most accurate about sole proprietorships? ✅forming a sole
proprietorship will enable you to be your own boss. But if you are really nervous about
risking your personal assets, you might want to consider some other form of ownership
because it will also expose you to unlimited liability
A basic characteristic ___ is that both producers and consumers are free to make their
own economic decisions on many basic issues. ✅capitalism
, A federal agency called the ___ was established to protect customer deposits in banks
and thrift institutions for up to $250,000 per customer, per bank. ✅federal deposit
insurance corporation
Nonprofit organizations are NOT in the business of: ✅financial gain (profit)
___ means that prices, on average, are rising. ✅inflation
A ___ is a legal business entity that offers limited liability to all of its owners.
✅corporation
___ are people willing to take the risk of starting, owning, and operating a business.
✅entrepreneurs
When the Federal Reserve feels the economy needs be boosted, it would: ✅lower the
discount rate
Within a limited partnership, the limited partner: ✅can only lose the money he/she put
into the company
Jacob currently works as a manager at a major corporation but has been thinking about
quitting to start his own business. Which of the following reasons would most likely
explain Jacob's interest in making this major career change? ✅He wants to have more
independence and flexibility than his corporate position allows
Good friends, Bernie and Latasha, both studied accounting in college. Recently they
decided to work together as co-owners of a small accounting firm. This is an example of
a(n) ___. ✅partnership
A ___ is a licensing arrangement under which one party allows another party to use its
name, trademark, patents, copyrights, business methods, and other property in
exchange for monetary payments and other considerations. ✅franchise
Lois has considered the opinions of many consultants, friends, and family members
about her new massage parlor business idea. Despite overwhelming negativity, Lois is
certain of her abilities and knowledge on account of her many years of experience in
this field. In this case, Lois displays the entrepreneurial characteristic of ___.
✅confidence
The idea of political philosopher Karl Marx are most closely linked to the economic
system known as: ✅communism
The form of business ownership (in the US) that generates the largest share of annual
revenues is: ✅corporation
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