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Entrepreneurship — Unit test Answers

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1
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Which best describes why governments collect taxes?

A
to control the value of currency
B
to keep the government running
C
to ensure surplus funds
D
to fund government programs
2
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Which group does the Fed serve?

A
financial institutions
B
consumers
C
government bodies
D
bankers
3

To be successful, what must an entrepreneur be willing to invest? Check all that apply.moneyunemploymentpersonal safetytimeconsiderable effort

m
money
u
unemployment
p
personal safety
t
time
c
considerable effort
4

The development of many new businesses helps limit

u
unemployment.
t
taxation.
r
revenue.
r
risk.
5

On which of these are individuals required to pay income taxes in the United States? Check all that apply.wagestipsgasolinestore purchasesinvestment earnings

w
wages
t
tips
g
gasoline
s
store purchases
i
investment earnings
6

Which body manages the Fed?

t
the Appropriations Committee
t
the Federal Reserve Board
t
the Federal Open Markets Committee
t
the Economic Policy Subcommittee
7

What part does interest play in deficit spending?

A
Governments must pay interest on money they borrow when they take on debt.
B
Citizens must pay interest when their governments borrow money.
C
Governments may charge foreign countries interest when they borrow money.
D
Interest is not a factor when a government’s budget is in deficit.
8

Which federal regulatory agency would most likely bring a civil suit against a business that broke securities laws?

t
the SEC
t
the FDA
O
OSHA
t
the FDIC
9

Successful entrepreneurs contribute to the economy by

b
becoming wealthy.
e
expanding markets.
e
encouraging free trade.
c
creating business strategies.
10

Expansionary spending takes place when a government makes the decision to

p
put a freeze on the number of its employees.
r
raise taxes to balance its budget.
r
raise taxes to run a budget surplus.
r
raise spending to stimulate the economy.
11

most likely

c
cooperatives give majority owners the most control, while franchises make decisions with a parent company.
c
cooperatives make it easy to accumulate supplies, while franchises come with supplier relationships already in place.
c
cooperatives are well financed by members, while franchises must raise large sums of money to launch a business.
c
cooperatives allow all owners to share profits, while franchises are required to share profits with a parent company.
12

Spending that can change from year to year is known as

A
discretionary spending.
B
deficit spending.
C
mandatory spending.
D
expansionary spending.
13

Which of these are goals of an expansionary policy? Check all that apply.increased available creditdecreased available creditincreased money supplyincreased inflationincreased interest ratesdecreased interest rates

A
increased available credit
B
decreased available credit
C
increased money supply
D
increased inflation
E
increased interest rates
F
decreased interest rates
14

Which statement explains a way how the Securities and Exchange Commission upholds fair business practices?

T
The SEC makes sure that banks follow federal laws.
T
The SEC tries to limit risk in the financial system.
T
The SEC generally oversees banking practices.
T
The SEC generally oversees financial advisers.
15

best

a
a tax that charges low-income earners a lower percentage than high-income earners
a
a tax that charges an equal percentage to all
a
a tax that charges earners based on their professions
a
a tax that charges high-income earners a lower percentage than low-income earners
16

What happens when a bank is required to hold more money in reserve?

A
It has less money for loans.
B
It has less money for operations.
C
It has less money for interest payments.
D
It has less money for withdrawals.
17

In which of the following ways do governments spend money to meet public needs? Check all that apply.by protecting the publicby arming the publicby providing health careby supporting educationby building roads and bridges

b
by protecting the public
b
by arming the public
b
by providing health care
b
by supporting education
b
by building roads and bridges
18

Occupational Safety and Health AdministrationEnvironmental Protection AgencyFood and Drug AdministrationSecurities and Exchange Commission

A
Occupational Safety and Health Administration
B
Environmental Protection Agency
C
Food and Drug Administration
D
Securities and Exchange Commission
19

producersconsumersgovernmentprices

A
producers
B
consumers
C
government
D
prices
20

best

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

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