When Buying an Existing Business,one Should Remember That

question 43

Multiple Choice

When buying an existing business,one should remember that:

• A)it is generally not important to independently evaluate the inventory.
• B)you are always buying goodwill with the tangible assets of the business.
• C)it is as easy to make change in an existing business as it is in a start-up.
• D)the real reason for selling is seldom stated honestly.

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Definitions:

Expansionary Gap

A situation where the actual output in an economy exceeds the potential output due to high demand, often leading to inflationary pressures.

Short-Run Aggregate Supply

The total supply of goods and services that firms in an economy plan on selling during a short time period, given the current level of prices.

Actual Unemployment

The current level of unemployment in the economy, reflecting the number of people who are actively seeking employment but are without jobs.

Natural Rate

The level of economic activity, particularly unemployment or interest rates, that corresponds to the economy's long-term equilibrium without short-term cyclical fluctuations.