fm116 exam #1 chapter1,2,6,7

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A franchisee disclosure document(FDD) is?

A document provided by a franchisor to the franchisee

Which of the following statement is true of a franchise your franchisee relationship?

A franchise or limits the franchisees territory from expanding into other areas

Which of the following statements is true of the formation of general partnership?

Expert legal assistance can be fired when drawing of a partnership agreement

The U.S small business Admissions (SBA) give free money to start-up business, grants interest- free loans, and fully guaranteed loans from local commercial lenders?

FALSE

The global entrepreneurship Monitor(GEM) shows that people living in high-income countries tend to be much more willing to start their own business than people living low-income countries

FALSE

a firm considers___________to increase size and market power with in the industry?

Horizontal mergers

Which of the following is a disadvantage of financing?

If I Franchise agreement usually Requires the franchisee to follow the franchisor's procedures to the letter

Real GDP measures the total value of final goods and services produced within a nation's physical boundaries over a given period of time, adjusted for?

Inflation

The owners of limited liability companies (LLCs) are called members because?

LLCs are neither corporations nor partnerships

A corporation is a separate entity from its owners where they?

Owners are not personally responsible for the obligations of the company

which of the following is an advantage of general partnership?

Partners capitalize on complementary skills

Which of the following is a disadvantage associated with sole partnerships?

Raising money for raising money to finance growth can be tough for business owners

Over the past 30 years, most economies of the world have begun moving towards the market end of a spectrum that ranges from pure planned economy at one extreme to pure market economy at the other,This has led to?

Reduced red tape in socialist governments.

In the case of C corporations, shareholders don't pay income taxes on?

Retained earnings

Which of the following is an end advantage of a C corporation?

Shareholders have a limited liability in the farm

Small business often have an advantage in foreign markets where customers want to deal directly with a company's top management?

TRUE

In the context of monetary policy, which if the following statements is true of money supply?

The M1 money supply includes all currency plus checking and traveler's checks.

One of the reasons why C corporations have an edge over so partnership is?

The permanence of the business

Which of the following is a characteristic of a limited liability companies ( LLCs)?

They are made to pay an annual franchise tax in many states

Which of the following statements is true of forming C corporations?

They required the adoption of corporate bylaws

Gross domestic product(GDP) levels tend to be somewhat understated, since they don't include any illegal activities, which can represent a significant portion of some countries production?

True

In the event that a large company has to downsize, the middle-aged workers who are laid off find it difficult to find new jobs when such workers decide to start their own business they?

are called necessity entrepreneurs

In the context of opportunities and treats,overhead costs for small business?

are often lower than big companies

In the context of the U.S economy, small business?

are often the first to contract when times are tough

In the context of planned economies, countries that adopted communism most likely developed?

cropping shortages and surpluses

Small business start ups are likely to find that getting commercial loans are?

difficult because lenders are reluctant to give loans to firms that do not have a track record

Which of the following is an issue associated with general partnerships?

difficulty faced by a partner when withdrawing from the company

The primary reason people choose to become entrepreneur is to?

earn more money

An advantage of franchising is?

easier access to funding

According to small business experts, while raising startup funds from friends are relative it is?

essential to keep the relationship as professional as possible

People with an external locus of control?

feel buffeted by focus such as random luck

Which of the following is an intimidating obstacle that small businesses face?

high health insurance cost

Which of the following pieces of information is found in the U.S small business Admission (sba) resources?

industry-specific statistics

In the context of franchising which of the following statement is true of a business format franchise?

it is an agreement in which franchisor grants the franchisee the right to both make and sell its good or service

Identify a true statement about the Federal Reserve ?

it manages the monetary policy of the United States

In the context of fundamental principles of a free market system, which of the following statement is true of demand curve?

it shows the relationship between price and quantity from a customer's standpoint

Which of the following is a negative factor that affects socialist economic systems?

lack of government ownership of key enterprises

Technological tools such as the internet and email have?

made is easy for small business owners to manage in their firms on the go

Which of the following is drawback of buying a franchise?

of the national brand suffers, so does the business

In the context of the various degrees of competition ,which of the following statements is true of oligopoly?

oligopolies typically avoid intense price competition

In the contact a limited partnership which of the following is an aspect the differentiates limited partners for the General partners?

participation in the management of a company

The Fed?

performs banking services for commercial banks in districts where it operates

In the context of monetary policy, the Fed is most likely to reduce the discount rate during?

recessions

______________________ are local offices- affiliated with the U.S small business administration- that provide comprehensive management assistant ot current and prospective small business owners.?

small business Development centers

Buying an established business is a better plan than starting your business from scratch because?

the organization structure is in place

Which of the following statements is true of necessity entrepreneurship in high income countries?

the rate of necessity entrepreneurship is low

Which of the following is an advantage of limited liability companies(LLCs)?

they can have any number of owners

there is no limit on the number of partners you can participate in a general partnership?

true

Which of the following is a powerful contribution made by small business to the U.S economy?

vitalizing inner cities

Which of the following is an advantage of starting a business from scratch?

you do not have to deal with a prior owner's bad decisions


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