When a Large Business Like IBM or General Motors Downsizes

question 32

Multiple Choice

When a large business like IBM or General Motors downsizes and lays off workers, some of these displaced employees decide to start their own businesses. They are best described as

• A) foreign refugees.
• B) welfare profiteers.
• C) reluctant entrepreneurs.
• D) corporate entrepreneurs.

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Definitions:

Effective Annual Rate

The effective annual rate is the real return on an investment, taking into account the effect of compounding interest over a year.

Annual Rate

The interest rate charged per year on a loan, or earned on an investment, not accounting for the effect of compounding within that year.

Actual Rate

The real interest rate or return rate earned on an investment, as opposed to the nominal or advertised rate.

Interest

The cost of borrowing money or the return on investment capital, usually expressed as a yearly percentage.