Question

6. Funds to purchase physical capital and land typically are supplied to new firms by _____ markets which include banks, bond markets, and stock markets.

A.

resource

B.

output

C.

product

D.

financial

7. For the owner of a new business, an advantage of issuing bonds to fund the business is that the owner:

A.

retains complete control of the business and all of the profits.

B.

avoids the financial risks of ownership but maintains control.

C.

gains knowledgeable advisors to help steer the business.

D.

expands the business but shares control and profits.

8. If a business issues stock, it is exchanging a portion of the business’ _____ for current funds to expand the business.

A.

past profits

B.

interest payments

C.

future profits

D.

intellectual property

9. The most important tool for building human capital is:

A.

experience.

B.

education.

C.

young workers.

D.

college.

10. To succeed, economists view businesses as needing _____ to turn physical inputs into valuable outputs.

A.

drive and imagination

B.

skills and experience

C.

ideas and innovation

D.

resources and employees

Answer 1