Intro to financial management test

Which of the following is an example of an ethical business activity?

The employee reported to his supervisors that a co-worker had misappropriated company funds.

in 2005, more than two-thirds of population of Haiti were not working, but were actively seeking employment. This 66.67 percent represents the nation's:

unemployment rate

_____ inflation is triggered by increases in production costs which increase the costs of final goods and services.

Demand-side

_____ is the reduction of a currency's value relative to another currency.

Devaluation

Which of the following is an example of a business?

Jack & Jill, a specialty clothing store for young children Ford Motor Company Wal-Mart Lawson & Tyler law offices Answer is all of the above

_____ is all the money a company earns from providing services or selling goods to customers.

Profit

_____ is a philosophy that focuses on the consequences of an action to determine whether it is right or wrong. This philosophy holds that an action that affects the majority adversely is morally wrong.

Utilitarianism

The _____ represents the prices of a market basket of goods and services as measured monthly by the Department of Labor. Group of answer choices

consumer price index (CPI)

Spanish customers view toothpaste as a cosmetic while consumers in the Netherlands view it as a necessary part of daily hygiene and use three times as much their Spanish counterparts. This example of _____ shows how important it is for marketers to understand.

cultural differences

When the economy is in a recession, many companies must lay off workers, which causes _____ unemployment.

cyclical

Which of the following is the best example of a service?

the pleasure you derive from seeing a good pla

When demand and supply meet, the price of the product or service is established. This is the point of:

equilibrium

A company can only be concerned about its _____ responsibilities once it has met its economic and legal responsibilities.

ethical

Mamma's Diner was a small restaurant that was a popular hangout for many Bedford College students, but because of the owner's inability to make the bathroom stalls handicapped accessible for the one wheel-chair student on campus, it was forced to close down. The belief that this it was morally wrong to deprive the majority of the people of this experience is an expression of the philosophy associated with:

utilitarianism

Social responsibility goes beyond obligations provided by law or union contract. Two important aspects of social responsibility are that the obligation is both

voluntary and broad

The Uruguay Round of trade negotiations:

was the most ambitious global trade agreement ever negotiated

Iris Souza started the summer with $30. She took $10 and made signs for her dog walking service. She posted the signs all over her neighborhood. She used the other $20 to buy a stout leash and a pooper-scooper. At the end of the summer, after buying herself a new pair of shoes for $50 (she had worn her other shoes out walking dogs), she had $125 left. What was Souza's profit for her summer job?

125

_____ are all the individuals or groups to whom a business has a responsibility.

Stakeholders

_____ is the practice of tying philanthropy closely to the corporate mission or goals and targeting donations to regions where a company operates.

Strategic giving

Which of the following businesses provides its customers with a good

bicycle manufacturer

Upward and downward changes in aggregate economic activity, as measured by GDP, are called:

business cycles

One of the reasons for the growing inflation rate in Argentina is due to increases in production costs of goods and services which occurred as a result of a decline in a suitable labor force. This would be an example of a _____ inflation.

cost-push

A homebuilder who disposes of asbestos shingles by burying them on his own property may please the home owner because it is a less expensive means of disposal but will be punished by various legal agencies if any become aware of his crime. At which stage of the social responsibility pyramid is the builder most likely operating?

economic

The new employee that Dunn Photographic Services hired is an example of which factor of production?

labor

Which of the following is an example of a factor of production? Group of answer choices

labor

Peter Drucker, a well-known management scholar, has said that companies should be evaluated on two basic dimensions:

legality and responsibility

_____ is the practice of limiting investments to securities in companies that behave in accordance with the investor's beliefs about ethical and social responsibility.

Social investing

Which of the following statements about utilitarianism is true?

Utilitarianism holds that an action that affects the majority adversely is morally wrong

Which of the following statements about utilitarianism is true?

Utilitarianism is designed to create both winners and losers.

A _____ regulation in the United States bans the use of foreign steel in constructing U.S. highways.

buy-national regulation

Individual ownership of property is a key element in

capitalism

The _____ for the Music Teacher's National Associations establishes a standard of conduct and recommends a set of responsibilities teachers should have toward students, colleagues and the public. These guidelines assist the professional music teacher in gaining the respect of peers and avoiding conflicts and complaints with students and others. It points out to members what are and what are not considered fair, honest and reasonable practice when dealing with students, colleagues and the public, it provides guidance for such aspects as advertising practices, appropriate relationships, and personal and professional integrity.

code of ethics

The Chubb Group, an insurance company, regularly supplies funds for programming on the public television network. Its donations are an example of:

corporate philanthropy

It has been alleged that a Coca-Cola water bottling plant in India has caused illegal water shortages in fifty villages that surround the bottler. If this accusation is true, than Coke was operating at which stage of the social responsibility pyramid?

economic

In the chocolate market, Green & Black is acting at the _____ responsibilities level of the pyramid of corporate social responsibility when it makes a profit, does so by abiding by the laws, and helps cocoa farmers by agreeing to pay above-market prices for cocoa. Group of answer choices

ethical

AT&T entered into a _____ with Compagnie General d'Electricite, a French company. The French company brings its patents on digital telephone switches, and AT&T provides the marketing know-how to the relationship.

joint venture

Another factor influencing business ethics is _____, or what is fair according to prevailing standards of society.

justice

Laws have curtailed smoking, and as a result, the sale of cigarettes is down. Rather than fighting the law, the cigarette industry is looking for ways to take their business beyond cigarettes. Many experts believe that the cigarette producers have found a way around the law with the promotion and distribution of smokeless tobacco, which has shown consistent sales gains over the last decade. In terms of the social responsibility pyramid, at which level is the cigarette industry operating?

legal

The implementation of a contractionary policy (tighten money supply) by the Federal Reserve would result in: Group of answer choices

lower inflation

A group of investors in a retirement fund removed their money from the fund when they learned the fund manager had invested in a gambling casino. The investors' religious beliefs lead them to believe in the fundamental evil of all forms of gambling. These investors were engaging in: Group of answer choices

social investing

Alonzo Dwork will not buy stock in a company that sells bottled water because more than 1.5 million barrels of oil are used annually to make the plastic bottles used for water, and nearly 90 percent of these bottles are disposed of after one use. Dwork is a strong believer in environmental protectionism, and this _____ is his way of expressing that belief.

social investing

Kraft Foods Inc. joined with the National Latino Children's Institute to announce Salsa, Sabor y Salud - a first-of-its-kind healthy lifestyles educational program designed by Latinos for Latinos. The program was created by NLCI in partnership with Kraft to support Hispanic families, a population particularly at risk for obesity and accompanying health problems. Kraft donated $2 million to the program's startup. This donation is an example of:

strategic giving

Which of the following is an example of a trend in ethics and social responsibility?

strategic giving

Forty-five percent of the labor force in Armenia is involved in the agricultural sector, but the economic growth in the nation comes from industry and tourism. What type of unemployment would such a mismatch of ability and job requirements cause?

structural

Social responsibility should extend beyond the shareholders to include:

suppliers community employees consumers Answer all of the above

Which of the following is the best example of a good?

the birthday candles you purchased to go on your sister's birthday cake

The most fundamental reason for the growth in world trade is probably due to:

the need for businesses to expand their markets

Market equilibrium is:

the point at which quantity supplied equals quantity demanded

Which of the following statements about social responsibility is true?

The obligation that a business has to act socially responsible extends beyond the investors in the company to include workers, suppliers, consumers, and communities.

When South Korea reduces the tariff that Japan (but only Japan) has to pay when it imports cameras into South Korea, it is called a:

preferential tariff

The _____ measures prices paid by producers and wholesalers for commodities, including raw materials and finished products.

producer price index

The _____ GDP takes inflation into account and uses adjusted market prices

real

Martha Maguire recently was laid off from her telemarketing job for a large catalog retailer. Each January, Maguire is laid off as soon as the Christmas season is over. She will be hired back sometime during the summer. In terms of unemployment, Maguire is a good example of _____ unemployment.

seasonal

Which of the following is NOT an example of a factor of production?

competition

Fiscal policy is concerned with:

taxation and spending

How has diversity impacted the marketing and customization of products?

Along with their numbers, the buying power of minorities is growing

_____ contributes to an employee's self-worth, which, in turn increases productivity and reduces absenteeism.

Empowerment

____ is the set of moral standards for judging whether something is right or wrong.

Ethics

Which of the following statements about ethics training is true?

Ethics training is formal training to develop awareness of inappropriate behavior and to practice appropriate responses.

_____ are goods and services that are made in one country and sold to other countries.

Exports

_____ are limitations on the quantity of certain types of goods that can be imported over a period of time.

Import quotas

Which of the following statements about human rights is true?

None of the above statements about individual rights is true.

____ refers to sending work functions to another country resulting in domestic workers losing their jobs.

Outsourcing

_____ combine the inputs in the production of goods and services for what are intended to be profitable ventures.

Revenue

Curtiss Anaya is planning to sell kites on the beach this summer to pay for next year's school expenses. _____ refers to the potential that Curtiss will lose money and waste his time and end up at the end of the summer with not enough money to cover his expenses.

Risk

Which of the following is an example of an unethical business activity?

The employee uses the company computer to check his results in a network auction. The employee told several jokes that demeaned Polish people. The salesperson allowed the customer to believe that delivery would be within the next week when the salesperson knew that delivery was at least four weeks away. The employee did not report his supervisor for taking several illegal deductions on his income tax report. Correct Answer All of the above are examples of unethical business activities.

The most basic measure of economic growth is the:

gross domestic product

One of the keys to ethical business behavior is:

how the company's top management conducts themselves

The U.S. has one of the very few areas in the world where kaolin can be mined. Kaolin is a necessary ingredient in many products ranging from stomach medication to paper. The U.S.-produced kaolin is sold all over the world. Kaolin is a(n) _____ for the countries that purchase it.

import

Utilitarianism:

is difficult to implement because it is hard to tell how one decision will impact a large number of people

Social investing:

is the practice of limiting investments to companies that have ethical policies that match those of the investor

In a(n) _____, a few sellers can exert substantial control over prices.

oligopoly

For most agricultural products, farmers produce homogeneous products, sell them to a common market, and generally cannot affect prices greatly. This is an example of which kind of market structure?

perfect competition

A company has achieved the level of _____ responsibilities when it has met its ethical, legal, and economic responsibilities.

philanthropic

Laws passed by the U.S. Congress concerning how U.S. businesses trade with Cuba would be an example of _____ factors that influence the business environment.

political and legal

Wal-Mart ran a series of ads in trade journals with the following headline: "We're Looking for Quality Products That Are Guaranteed Not to Last." What Wal-Mart was in fact doing was asking its suppliers to develop more environmentally friendly products and to use material that could be recycled. This concern about the environment is one way that Wal-Mart practices:

social responsibility

For Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, its employees, suppliers of the paints used to decorate its porcelains, retailers of its products, and people who benefit from its philanthropy are all:

stakeholders

What are the benefits associated with free trade and globalization?

An open economy that spurs innovation

The original purpose of the _____ was to help build infrastructure in developing countries and to help relief the debt burden of these countries.

World Bank

In a large metropolitan market, it is relatively easy to set up a law office. The ease of entry explains why you will find hundreds of lawyers listed in the New York City phone book. Each lawyer is a close substitute for another but with slight differences. Which of the following market structures best describes the one in which lawyers operate? Group of answer choices

monopolistic competition

A "mixed economy" is an economic system that:

combines private and government ownership of the factors of production

A domestic firm may decide to contract for the production of its goods by an established foreign manufacturer. Such private-label manufacturing by a foreign company is called:

contract manufacturing

Which of the following factors would most likely result in a shift in the demand curve

prices of substitute products

The Home Depot supplies all the materials and the labor expertise for Habitat Homes in various regions of the country where the retail giant has a store. Its top management believes that this type of philanthropy better reflects the company's commitment to the community than simple donations to the American Cancer Society and similar national charities. The Home Depot is using the practice of:

strategic giving

A(n)_____ occurs if a country's total expenditures are higher than the revenues received from the taxes it gathers.

federal budget deficit

A market in which there are a large number of firms that differentiate their products is called:

monopolistic competition

The Caucasus Mountains along the northeastern border of Georgia (one of the former Soviet republics) makes it difficult for the nation to trade with other former Soviet republics that are to its north and east. The mountain range acts as a(n):

natural trade barrier

The World Bank's emphasis has recently shifted from helping to build the infrastructure of developing countries to:

offering loans to help to relieve their debt burden

During a two-month period Lladro Comercial, S.A., the manufacturer of handcrafted porcelains, donated ten percent of its retail profits to the Susan G. Komen Breast Cancer Foundation. The action was legal and ethical and allowed the company to still be profitable. According to the pyramid of corporate social responsibility, it was acting at the _____ responsibilities level.

philanthropic

Seeds of Change manufactures and markets certified organic entrees. Its mission reads, "At Seeds of Change, we're committed to making delicious foods that are healthy for you as well as the planet." In support of this mission, the company donates money to support environmental protection activities. In other words, Seeds of Change engages in:

strategic giving

China imposes a 45 percent tax on the market value of all chickens that are imported from the U.S. into China. Another name for this type of tax is a(n):

tariff

The Royal Government of Bhutan imposes a 10 percent tax on all operating tables, examination tables, and dentist's chairs imported into Bhutan. Another name for this type of tax is a(n):

tariff

When a single firm accounts for 100 percent of industry sales, it is an example of:

a pure monopoly

In 1993, Purdue Pharmaceuticals of Stamford, Conn. applied for the first in a series of patents on Oxycontin, a painkiller. The U.S. Patent and Trademark Office (PTO) granted those patents based on the manufacturer's contention that the drug contained a novel innovation: It had been engineered so that only a very small dose was required for the drug to be effective for 90 percent of patients. Seven years later, a generic drug maker, Endo Pharmaceuticals, applied to the FDA for permission to sell its own, lower-priced version of Oxycontin. Purdue's patents acted as a(n) _____ and prevented Endo from entering the market.

barrier to entry

Which of the following would be stakeholders for a manufacturer of agricultural pesticides?

employees of the plant EPA representatives who inspect the plant the farmers who buy the products people who live in the community in which the plant is located Answer is all of the above

A retailer that allowed its employees to handle a customer complaint without having to ask for permission or direction from management would have:

empowered its employees to help customers

A country that exports more goods than it imports is said to have a(n):

favorable balance of trade

Because the government owns the factors of production in public lands, postal service, and some water resources, Great Britain is considered a(n):

mixed economy

Singapore has granted a(n) _____ on the importation of beer and stout made in the Philippines. This means that beer and stout made in the Philippines can sell for less in Singapore than beer and stout made by New Zealand or the United States

preferential tariff