Economics Unit 4 Review

The easiest type of business to start is a sole proprietorship.

• True

• False

Unlimited liability is one of the main advantages of a sole proprietorship.

• True

• False

Partnerships are the most numerous form of business organization in the United States.

• True

• False

Corporations have most of the rights of an individual, according to the law.

• True

• False

If a corporation goes out of business, common stockholders get their investment back before preferred stockholders do.

• True

• False

The government document that grants permission to establish a corporation is called a:

• limited liability corporation

• partnership agreement

• stock certificate

• charter

A business run by a single person is a:

• partnership

• corporation

• limited liability corporation

• sole proprietorship

In a retail business, the stock held in reserve is called:

• profits

• capital

• raw materiels

• inventory

Which of the following phrases best defines the term limited partnership?

• an organization that limits liability to the corporation rather than the individual owners

• a business that is limited to three or fewer investors

• a business model that combines aspects of corporations and partnerships

• a partnership in which at least one partner has less responsibility in the business operations and less liability for business losses

A document certifying ownership of part of a corporation is a:

• bond

• dividend check

• charter

• stock certificate