class notes chapter 6

There are about _____ million business firms in the United States.

30

During severe recessions, our capacity utilization rate falls to around _____ percent.

70

In Marx's terms, the people who wait outside the factory gates for work are the _______.

Reserved Army of the Unemployed

A corporation is controlled by its _____________.

common stock holders

A corporation is owned by its _____ and its ______.

common; preferred stock holders

The least stable form of investment is __________ investment.

inventory

1. Of the big three spending sectors of GDP, the least stable is _____________.

investments

The key advantage of incorporating is ___________.

limited liability

According to Karl Marx, capital was created by the ______ and expropriated by the ____.

workers and capitalist

The two main disadvantages of incorporation are _______ and _________

High corporations income and the cost of incorporating

A partnership is owned by ________ people.

2 or more

Theoretically, you would need to investment of about $________ to control a corporation that had $100 million in preferred stock, $50 million in common stock, and $350 million in bonds.

25 million and 1 share

Total investment is found by adding ____________, __________ and _____________.

Inventory Investment Investing in Planning Equipment Residential Housing Investments

The creditor of a corporation are mainly its ______________.

bond holder

Gross investment - __________ = Net investment

depeciation

The expected profit rate is found by dividing __________ by ______________.

expected profits by amount invested

An investment will be undertaken if the expected profit rate is higher than the _________.

interest rate