3
practice testMultiple Choice

Practice Test

Question 3 • Personal Finance and Economics

Which best explains why a sole proprietor would want a partner?

Answer
A
to reduce the number of responsibilities.
B
to make it easier to raise funds for expansion.
C
to move into a more favorable tax bracket.
D
to take advantage of little government oversight.

Explanation

A partner can contribute money to the business, and the owners may also find it easier to attract loans or other investment together. This makes it easier to raise funds for expansion. A partner does not necessarily reduce responsibilities or change the tax bracket, and limited government oversight is not the main reason to add a partner.

AI-written and checked against the verified answer.

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