Torrie Is Thinking of Starting Up a Small Business Selling

question 169

Multiple Choice

Torrie is thinking of starting up a small business selling hand-painted wine glasses.She is considering setting up her business as a corporation.What is one advantage to Torrie of setting up her business as a corporation?

• A)By setting up the business as a corporation,Torrie would not face double taxation.
• B)By setting up the business as a corporation,Torrie would have the ability to share risk with shareholders.
• C)By setting up the business as a corporation,Torrie would have both ownership and control over the business.
• D)All of the above would be advantages of setting up her business as a corporation.

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Definitions:

Induced Consumption

Induced consumption is the portion of consumer spending that varies with income levels, suggesting that as people earn more, they tend to spend more.

Disposable Income

Household fiscal resources for saving and spending following the deduction of income taxes.

Autonomous Consumption

The level of consumption that occurs when income is zero, representing the expenses that consumers must make for basic needs regardless of their income.

Induced Consumption

The portion of consumer spending that increases as disposable income rises, typically leading to more purchasing.