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Macroeconomics

Stephen Slavin

Chapter 6

The Business–Investment Sector - all with Video Answers

Educators

Chapter Questions

Problem 1

What are the advantages and disadvantages of the corporation as a form of business organization?

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00:40

Problem 2

Explain how the capacity utilization rate and the interest rate affect the level of investment.

Rae Xin
Rae Xin
Numerade Educator

Problem 3

Explain why building up capital takes a great deal of sacrifice.

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Problem 4

The Carolina Textile Corporation is capitalized at $$\$ 200$$ million. If you wanted to buy control of this company, how much money would you have to spend? Since you don't have nearly enough information to make this decision, just make some reasonable assumption about its bonds, preferred stock, and common stock.

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01:37

Problem 5

What has happened to our personal savings rate in recent years, and how has that affected our level of investment?

Pragya Ahuja
Pragya Ahuja
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Problem 6

If you owned a business and were considering increasing your level of investment, what would be the most important factor you would consider in determining how much you planned to invest? Explain why you chose that factor.

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Problem 7

Why are virtually all large business firms corporations?

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02:24

Problem 8

The Swanson Company, a partnership, was formed in 1999 by Jill Swanson, Jenne Swanson, Duke Swanson, Gage Swanson, and Maggie Swanson. In 2000 Holly Swanson and Missy Swanson were taken into the partnership. In 2001 Duke Swanson left the partnership and Brenda Swanson and Jerry Swanson joined it. In 2002 Jill Swanson left the partnership and Buddie Swanson joined it. In 2003 Forrest Swanson joined the partnership. Explain why it would have been easier for this company to have begun as a corporation rather than as a partnership.

Tommy Nguyen
Tommy Nguyen
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03:19

Problem 9

Practical Application: You and three friends have saved $$\$ 100,000$$ and decided to form a computer repair business. Would you form a partnership or a corporation? Explain why you made this choice.

Kaylee Mcclellan
Kaylee Mcclellan
Numerade Educator