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Entrepreneurial Finance 6th Edition By Philip J. Adelman -Test Bank
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TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.
1) Finance is any transaction where money is exchanged for goods and services. 1)
Answer: True False
2) Finance is any transaction where money is exchanged for money or a money-like instrument. 2)
Answer: True False
3) A dividend is an after tax payment that must be made by all stock companies to the stockholders 3)
each year.
Answer: True False
4) The United States operates with a free enterprise system. 4)
Answer: True False
5) A market economy is one where all goods and services are exchanged freely. 5)
Answer: True False
6) Wheat, soybeans, oil, and gold are commodities. 6)
Answer: True False
7) The mental and physical talents of human beings are entrepreneurial resources. 7)
Answer: True False
8) The stocks and bonds issued by a corporation are the economic capital resources of the corporation. 8)
Answer: True False
9) The stocks and bonds issued by a corporation are the financial capital resources of the corporation. 9)
Answer: True False
10) In market transactions, when one party wins, the other usually feels as though he or she lost. 10)
Answer: True False
11) The law of demand states that as the price of an item falls, the quantity demanded will decrease, 11)
ceteris paribus.
Answer: True False
12) As the price of an item increases, the quantity of the item provided to the marketplace will increase, 12)
ceteris paribus.
Answer: True False
13) First National Bank is the central bank of the United States. 13)
Answer: True False
1
, 14) The Federal Reserve is the central bank of the United States. 14)
Answer: True False
15) In order to increase the money supply, the Fed will sell government securities. 15)
Answer: True False
16) A person making less than the cutoff rate for Social Security pays 6.2% of his income in Social 16)
Security taxes.
Answer: True False
17) A person making $90,000 or less pays 6.2% of his salary in Social Security taxes. 17)
Answer: True False
18) An athlete making $7,000,000 pays 6.2% on the full $7,000,000 in Social Security taxes. 18)
Answer: True False
19) Social Security tax is regressive to the person making less than the cutoff rate. 19)
Answer: True False
20) The Medicare tax of 1.45% is a proportionate tax for all. 20)
Answer: True False
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.
21) Which of the following can be used to finance a small business? 21)
A) using one's own savings
B) borrowing from other individuals
C) borrowing money from financial institutions
D) using cash generated from current sales
E) all of the above
Answer: E
22) Which of the following is NOT a viable source of financing for the small business? 22)
A) borrowing from other individuals
B) using one's own savings
C) using cash generated from current sales
D) borrowing money from financial institutions
E) issuing bonds to the general public
Answer: E
23) An organized effort where goods and services are freely exchanged is known as a 23)
A) government. B) market. C) religion. D) business.
Answer: B
24) Which of the following is NOT a primary participant in the financial marketplace? 24)
A) businesses B) military units
C) governments D) individual households
Answer: B
2
, 25) There are several markets in the United States. The market where property is exchanged is the 25)
A) financial market.
B) retail market.
C) commodity market.
D) real estate market.
E) none of the above.
Answer: D
26) There are several markets in the United States. The market where corn, wheat, soybeans, and oil are 26)
exchanged is the
A) real estate market.
B) retail market.
C) financial market.
D) commodity market.
E) none of the above.
Answer: D
27) There are several markets in the United States. The market where stocks, bonds, and money are 27)
exchanged is the
A) financial market.
B) retail market.
C) commodity market.
D) real estate market.
E) none of the above.
Answer: A
28) There are several markets in the United States. The market where television sets are exchanged is 28)
the
A) retail market.
B) real estate market.
C) financial market
D) commodity market.
E) none of the above.
Answer: A
29) There are several markets in the United States. The market where final goods and services are 29)
exchanged is the
A) retail market.
B) commodity market.
C) financial market.
D) real estate market.
E) none of the above.
Answer: A
30) The primary savers of funds in the United States are 30)
A) governments.
B) households.
C) businesses.
D) all of the above.
E) none of the above.
Answer: B
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