ECON CH. 8 - GUIDED READINGS

One company may merge with another to ________ and acquire new ________ line.

create, product

A ________ union is a type of service ________ that provides financial services to its members.

credit, co-op

Most producer co-op members are ________ who provide their products directly to ________ .

farmers, consumers

In a ________ partnership, all partners are responsible for the business's finances and ________ .

general, obligations

A sole proprietorship is not ________ , so it is ready for business as soon as operations are set up, and the owner keeps all the ________ .

hard, profit

A ________ merger is when two companies that produce the ________ type of product join together to form a single company.

horizontal, same

A firm's ________ , or cash flow, is its profits after deductions for all expenses, including ________ , or wear and tear on capital goods such as machinery.

income, depreciation

Some states and universities run new business ________ that help ________ entrepreneurs in the skills they need to run a successful business.

incubators, potential

The government has an ________ role when its actions help to make the ________ economy run more smoothly.

indirect, market

Payments and funds generated from ________ government actions often give recipients a ________ ________ that they would not otherwise have.

indirect, purchasing power

Some workers belong to ________ unions that engage in ________ bargaining with management for better pay and working conditions for their members.

labor, collective

A corporation with a ________ cash flow may give some of that money to its investors in the form of ________ .

positive, dividend

The results of the actions of nonprofits are difficult to ________ , but they are important contributors to our _________ system.

analyze, economic

A friend, neighbor, family member, or club may act as an ________ investor to provide ________ money to a promising start-up.

angel, seed

The Better Business ________ provides general information on companies and maintains records of consumer inquires and ________ .

bureau, complaints

Business associations, such as local chambers of ________ , work to create a favorable environment for member ________ .

commerce, businesses

It is more ________ to start a corporation than other forms of business, and corporations are subject to more ________ than are most other types of business.

complicated, taxes

The potential for ________ between partners is a disadvantage of partnerships, as is its limited ________—the partnership must be dissolved and reorganized if any partners leave or die.

conflict, partnership

A company is called a ________ when it has merged with at least four other companies making ________ products.

conglomerate, unrelated

A ________ cooperative buys food or other goods in bulk so that members pay ________ prices for the products.

consumer, lower

Many government agencies produce and distribute goods and services to ________ , giving the government a ________ role in the economy.

consumers, direct

A business must get a legal ________ before it can be formed into a corporation that may issue ________ and bonds.

contract, loans

A ________ often pays thousands of dollars to run the business sold by the ________.

corporation, owner

Owning a franchise gives the businessperson brand-name ________ , known quality products, and a regional or nationwide ________ system to improve the chances of success.

items, network

A sole proprietor has unlimited ________ for his or her business, which means that he or she is fully responsible for all of the businesses loses and debts. A sole proprietor may also have trouble raising needed ________ .

liability, profit

As its own entity, a corporation has an unlimited ________ , and ownership can easily be ________ .

life, shared

Because of ________ ________ ________ , the sole proprietorship may have trouble hiring the employees it needs and carrying enough ________ to satisfy customers or to keep production flowing smoothly.

limited financial capital, stock

In a ________ partnership, each partner is liable for only the amount of his or her original ________ in the business.

limited, investment

In a ________ partnership, at least one ________ is not active in running the business and has limited responsibility and ________ liability.

limited, partner, limited

Partnerships are easy to start and, because each partner brings a different area of expertise, generally easy to ________ ; they have an easier time attracting ________ than does a sole proprietorship.

manage, capital

A ________ company has operations in many different ________ around the world.

multinational, countries

Online social ________ provide a platform for ________ , which allows interested individuals to invest in a promising enterprise.

networking, crowdfunding

A ________ may be formed with a handshake, formal ________ papers are usually drawn up to make the business arrangement official.

partnership, legal

The Tennessee Valley Authority supplies ________ to customers and is in direct ________ with private utility companies.

power, competition

State and local government provide police, fire fighting, and other ________ services ________ to consumers.

protection, statewide

Businesses may take the positive cash flow and ________ by expanding its product line, increasing ________ , or upgrading its machinery or technology.

reinvest, production

Multinational corporations can efficiently move ________ , transfer technologies, and create ________ in many nations.

resources, jobs

One downside to a general partnership is that all partners are ________ for the acts of all other partners and have unlimited ________ for the business's debts and losses.

responsible, liability

Merged companies enjoy greater economies of ________ as their cost per unit of production ________ .

scale, lowers

Examples of indirect government activities in the market include its provision of ________ to college students and ________ Security payments to senior citizens.

scholarships, social

Doctors, lawyers, and other professionals may belong to professional ________ that work to ________ policies that benefit their professional membership.

societies, improve

A sole proprietorship is easy to ________ , and it is ________ , because the owner does not have to confer with or answer to anyone else before making a decision.

start, manageable

Its income ________ shows a business's sales, expenses, and ________ income, or the amount it has as profit after expenses have been deducted.

statement, net

The true owners of a corporation are its ________ , who may also be paid a ________ from the profits of the corporation.

stockholders, dividend

Advantages of a corporation are that it can raise capital by selling ________ and its owners and managers have little ________ for its actions or debts.

stocks, revenue

A sole proprietor does not have to pay separate business income ________ and can ________ close down the business.

taxes, easily

There is a substantial cost if a franchisee wants to ________ the franchise before the end of the contract, and at the end of the contract, all the franchisee has is the right to ________ .

terminate, renew

A ________ capitalist invests money in a new and promising, though unproven, start-up company, even though this investment carries a lot of ________ .

venture, losses

A ________ merger is when two companies involved in different steps in ________ and marketing join together.

vertical, manufacturing

A cooperative is a ________ association that benefits its ________ .

voluntary, members

Owners of common stock can ________ for a board of directors, but owners of ________ stock cannot.

vote, preferred