Entrepreneurial Economics Quiz

What is the primary role of an entrepreneur in an economy?

• To regulate markets

• To innovate and create new products

• To collect taxes

• To provide government subsidies

Which of the following is a characteristic of an entrepreneur?

• Risk-averse

• Highly dependent on external support

• Risk-taker

• Prefers stable conditions

In entrepreneurial economics, the term "creative destruction" is associated with which economist?

• Milton Friedman

• Joseph Schumpeter

• Adam Smith

• David Ricardo

Which of the following is NOT considered a benefit of entrepreneurship to the economy?

• Job creation

• Innovation

• Economic stagnation

• Increased competition

Which economic system encourages entrepreneurship the most?

• Command economy

• Mixed economy

• Market economy

• Traditional economy

Which of the following is considered a short-term source of finance for a business?

• Bank loan

• Trade credit

• Equity shares

• Debentures

What is the primary advantage of equity financing for an entrepreneur?

• Interest payments are tax-deductible

• No need to repay the investment

• Lower control over business

• Higher financial risk

Which of the following is a source of long-term finance?

• Bank overdraft

• Commercial paper

• Venture capital

• Trade credit

What is the primary disadvantage of debt financing for a start-up?

• It dilutes ownership

• Interest payments can reduce profits

• It gives up control over the business

• It is free of any cost

Which type of funding is typically provided by friends and family to start a new business?

• Angel investment

• Crowdfunding

• Bootstrapping

• Venture capital