BUSI Midterm

Which of the following countries has a trade deficit?

A European country that has a higher total value of imports than exports

__________is an agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses.

A strategic alliance

The government of Lebitz, a European country, learns that low-priced textile imports from Pruneia, an Asian country, are affecting the sales of domestic textile companies. The Lebitzian government decides to levy a 6% tax on all textile goods imported from other countries. In this scenario, which of the following trade restrictions does the Lebitzian government impose?

A tariff

Grettzee, a musical instruments manufacturing company, imports high-quality maple wood from Resumbro, a South Asian country where maple is found in abundance. Which of the following is most likely to have influenced Grettzee's decision to import raw materials from Resumbro?

Access to factors of production

Ricord Books, a publication house, faced huge losses after 2008. The majority of its readers were born during the late 1950s, whose population was rapidly declining. Most modern readers preferred using e-books rather than reading from hard copies. This resulted in a decrease in the sales of Ricord Books. Identify the dimension of the social environment that this scenario exemplifies.

Aging population

Temont Esson, a pharmaceutical company, saw a drastic increase in its sales in 2016 when compared to 2015. A survey showed that the growing percentage of the elderly was directly responsible for improving the company's sales. Identify the dimension of the social environment that this scenario exemplifies.

Aging population

Touca Ness, a fantasy movie franchise, was initially created for children in the early 1960s. However, as the franchise started to gain a cult following, the content of the franchise began to include mature themes in order to maintain popularity among its existing consumers. Identify the dimension of the social environment that this scenario exemplifies.

Aging population

Which of the following countries exemplifies the concept of opportunity cost?

An Asian country that increases its production of sugar by decreasing its production of cocoa

In the context of international trade, which of the following statements is true of comparative advantage?

As technology changes, nations may gain or lose comparative advantage in various industries.

__________is a widely accepted social movement that supports a buyer's right to be informed, to be safe, to choose, and to be heard

Consumerism

Trexlex, a sports retailer, employs Olympic hopefuls in its stores through the Olympic Job Opportunities Program. It offers athletes full-time pay and benefits for a flexible 20-hour workweek to accommodate their training schedules. In the context of a business's responsibility toward the community, this act by Trexlex exemplifies _____.

Corporate resonsibility

Operth, an automobile company, hires people from various cultural and social backgrounds. This allows the company to enjoy a competitive advantage by developing innovative products that serve a wide customer base. Which of the following dimensions of the social environment does this scenario exemplify?

Diversity

Torino Mex, a men's fashion boutique, is renowned for creating designer clothes for Latino Americans. However, it introduced a new line of designer clothing that especially caters to young Hispanic Americans to widen its customer base. Which of the following dimensions of the social environment is highlighted in this scenario?

Diversity

Raebin Xi, a stock management firm, implemented a new rule that allows its clients to have better clarity and knowledge about the firm's core functions and methods of operation. Identify the dimension of the social environment that this scenario exemplifies.

Ethics

Welterwes, a multinational company, has 15 members in its top management. These executives have to abide by the same company policies as the other employees. However, when it came to light that the executives were not following the appropriate office timings and were abusing their power, the HR department had to pass new policies aimed specifically at the top management. These policies stated that the executives would lose a part of their monthly commission if they failed to abide by the company policies. Identify the dimension of the social environment that this scenario exemplifies.

Ethics

Samuel is struggling to run his start-up in his locality because local trade associations have established strict codes of conduct regarding certification, accreditation, and insurance obligation for businesses. In the context of economic freedom in a business environment, which of the following is adversely affecting Samuel's start-up?

Excessive regulation

In the context of global trade, the__________is a measurement of the value of one nation's currency relative to the currency of other nations.

Exchange rate

Gross Domestic Product (GDP) measures the total value of all the imports and exports of a nation on a quarterly basis.

False

In the context of competitive advantage, the value of the first-best choice represents the opportunity cost of producing a second product.

False

In the context of monetary policy, when the Fed reduces the discount rate, banks will have to obtain funds at a higher cost.

False

Socialism is an economic system that encourages privatization and believes that all enterprises should be publicly owned.

False

Verti, a North American country, engages in business with Jerg, a South American country. Verti imports agricultural products from Jerg, whereas Jerg outsources its technological operations to workers in Verti. The two nations are able to carry out these business transactions with minimal tax implications. The given scenario most likely exemplifies the concept of _____.

Free trade

Marsa and Hunare are Asian nations. Jorwen, Kellpit, and Denqor are North American nations. These five nations recently signed a multilateral agreement that allows them to carry out business operations with minimal tax implications. This arrangement would allow Jorwen, Kellpit, and Denqor to import goods from Marsa and Hunare, which have low labor costs and high production quality. This agreement among these five nations is most likely possible because of the _____.

General Agreement on Tariffs and Trade

A coal mining company has employed around 250 miners who work 8-hour shifts every day. In the context of factors of production, the miners can be classified as _____.

Human Resources

Gormath Inc., a shoe manufacturing company, employs 750 workers to create handcrafted shoes. In the context of factors of production, the employees of Gormath Inc. can be classified as _____

Human Resources

Richard is a technical analyst at a marketing firm. He is highly regarded by his peers and supervisors who always seek his advice while making important decisions for the company. In this scenario, Richard can be classified as a(n) _____.

Human Resources

Luchen Modo, a software development firm in Asia, launched a new software for smartphones that allowed users to remotely control certain functions and features of their vehicles, such as ignition, windshields, and headlights. The success of this technology prompted other companies across the world to produce similar software. In this scenario, which of the following is most likely to have influenced other companies to produce similar software?

Inflow of innovation

In the context of the strategies for reaching global markets, which of the following is a key risk of foreign outsourcing?

Involvement of social responsibility

In the context of foreign direct investment, which of the following statements is true of a partnership?

It is a formal, long-term agreement.

In the context of a socially responsible organization, which of the following statements is true of consumerism?

It is a movement that suggests that customer rights should be the starting point of any business.

In the context of the strategies for reaching global markets, which of the following statements is true of exporting?

It is the most basic level of international market development.

In the context of bringing the code of ethics of a company to life, which of the following statements is true when experts try to advocate a forceful, integrated approach to ethics?

It should be ensured that the company's ethics code is both local and global in scope.

In the context of fundamental principles of a free market system, which of the following statements is true of a demand curve?

It shows the relationship between price and quantity from a customer standpoint.

In the context of fundamental principles of a free market system, which of the following statements is true of a supply curve?

It shows the relationship between price and quantity from a supplier standpoint.

Who among the following is most likely to benefit in a case where there is a weak dollar against a euro?

John is an American who exports goods to Europe.

Which of the following is the most costly form of foreign direct investment?

Offshoring

Which of the following tools is most frequently used by the Fed to expand and contract the money supply in the economy?

Open market operations

In the context of economic considerations when entering a foreign market, which of the following is an example of an energy infrastructure in a country?

Power plants

In the__________, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term ties.

Relationship Era

Adhering to a new act passed in 2002, the CEO of Pearsil & Pearsil, a real estate company, now personally certifies the validity of the company's financial statements. Given this information, the CEO most likely follows the_____.

Sarbanes-Oxley Act

Antonsen Inc., an accounting firm in Texas, follows certain guidelines while providing consulting services to a firm. One such guideline is to limit the services it provides to the firms it audits. The CEO of Antonsen Inc. is also required to certify the validity of the company's financial statements. In this scenario, Antonsen Inc. most likely abides by the requirements of the _____.

Sarbanes-Oxley Act

The _____ limits conflict-of-interest issues by restricting the consulting services that accounting firms can provide for the companies they audit.

Sarbanes-Oxley Act

An automobile company is asked to recall 20 batches of its sports utility vehicle after it is found that a defect in the exhaust system of the car causes it to emit more smoke than the level permitted. In this scenario, the car manufacturing company is exceeding its _____ emissions.

Scope 3

In the context of open market operations, when inflation is a concern, the Federal Reserve _____ government securities.

Sells

The trade union members of a wool manufacturing company are the company's _____.

Stakeholders

The term _____ refers to the quantity of products that producers are willing to offer for sale at different market prices.

Supply

During a period of grave financial crisis in the United States, Congress is pressurized to raise the limit on the maximum amount of money the government can borrow. Congress increases the limit on the condition that it will implement sharp tax hikes and across-the-board spending cuts to compensate for the raise and to ensure that the overall budget deficit decreases. In this scenario, the measures implemented by Congress will most likely create:

The Fiscal Cliff

In the context of the strategies for reaching global markets, which of the following is a disadvantage of foreign outsourcing?

The adherence to ethical standards by foreign producers is at risk.

In the context of the history of American business, which of the following statements is true of the production era?

The assembly line became standard across major manufacturing industries.

Restazure, a beauty therapy center, focuses on customer satisfaction and building long-term relationships with customers. The firm ensures that customers are provided with high-quality services, and feedback is collected after every customer visit. It also provides its members with seasonal discounts and points every time they avail any of the center's services. In this context, which dimension of the business environment is affected the most?

The competitive environment

In the context of price levels, which of the following measures is used by the government to evaluate inflation?

The consumer price index

Marina, a garments manufacturing company, signed a contract with Tertch Tex, a textile company, to receive 2 million pounds of yarn at a rate of $2 per pound. However, Tertch Tex hikes up the price to $5 per pound just before the day of delivery. Marina files a lawsuit against Tertch Tex for breaking an enforceable contract and receives $100 million in compensation. In this context, which dimension of the business environment is affected the most?

The economic environment

Barter Bate, a wholesale store chain, was the first in the city to launch an online shopping website. Its website allowed customers to select required products and collect them from the nearest Barter Bate outlet. In this context, which of the following dimensions of the business environment is affected the most?

The technological environment

The total value of the goods exported by Maulini, a South American country, in the last fiscal year was lower in comparison to the total value of the goods imported by it. Given this information, Maulini had a _____ in the last fiscal year.

Trade deficit

When the total value of a nation's exports is higher than the total value of its imports, that country has a(n) _____.

Trade surplus

According to research from the Ethics Resource Center (ERC), organizational culture is most influential in shaping the ethical conduct of individual employees.

True

Deflation refers to a period of falling average prices across an economy, which is a sign of economic trouble that goes hand-in-hand with very high unemployment.

True

The balance of trade plays a central role in determining the balance of payments.

True

Which of the following is a difference between the supply curve and the demand curve?

Unlike the supply curve, the demand curve for most goods and services slopes downward as it moves to the right.

Yanmei, an employee at a news agency, learns that the reason her colleague was asked not to pursue a news story further was because the editor of the newspaper was bribed by the concerned party to suppress the matter. Yanmei reveals this information to the chief editor and her colleagues and also reports it to the media. In this scenario, Yanmei is a _____.

Whistle Blower

Nessi Bru, an American construction firm, and West Brook Inc., a Canadian construction firm, collaborated on an infrastructure project to build a railway track from Regina in Canada to Minneapolis in the United States. They shared their resources, risks, and profits, but they still functioned as two independent firms. In this scenario, Nessi Bru and West Brook Inc. were most likely involved in _____.

a joint venture

Brentia, an East Asian country, exported goods worth $50 million and imported goods worth $5 million in the last fiscal year. It also provided a loan of $25 million to another country. In this scenario, Brentia most likely had a _____ in the last fiscal year.

balance of payments surplus

The United States goes through a period of recession because of the continuous decrease in the nation's gross domestic product. The Fed intervenes and improves the situation by reducing the discount rate. This move by the Fed will result in:

banks obtaining funds at a lower cost

Danny is a citizen of Finiz, a North American country. He is able to run his handicraft business without any intervention from the government because Finiz has an economic system that encourages private ownership. He is able to make independent decisions for his business and has the freedom to decide the prices of his products. In this scenario, Finiz most likely has a _____.

capitalist economy

One of the ways by which companies can show their responsibility toward the environment is by reducing their _____.

carbon footprint

Crayon, a well-established beauty products company, partnered with the Lenora Birdstone Foundation, a nonprofit organization, to raise awareness about breast cancer and collect funds for setting up a cancer unit at a local hospital. The company accumulated a sum of $5 million by selling organic creams to more than 2,000 people. In this scenario, Crayon was most likely involved in _____.

cause-related marketing

Rupert is an individual who believes in contributing to the community by using eco-friendly products. In the context of universal ethical standards, Rupert most likely possesses the core value of _____.

citizenship

In the context of open market operations, when inflation is a concern, the Fed sells securities to buyers who write checks to the Fed to pay for securities they bought, and the Fed withdraws these funds from banks. With fewer funds, _____.

credit becomes tighter

In the context of planned economies, countries that adopted communism most likely developed:

crippling shortages and surpluses.

The country of Trevanvia goes through a period of recession, which leaves a large number of people unemployed due to extensive layoffs by companies. The companies use the strategy of job termination to cut down their costs and reduce their output as the people are now more cautious with their spending. In the given scenario, the layoffs that take place exemplify _____.

cyclical unemployment

A newly appointed government in the United States requests Congress to raise the amount of money that the government can borrow. This borrowed money is intended to be used to cover the costs of the major policies that it plans to implement. In this scenario, the government has asked the Congress to hike its _____.

debt ceiling

Judith plans to start a prosthetic company to help physically challenged people avail prosthetics at affordable prices. She researches and develops a cost-effective way of crafting durable prosthetics. In the context of factors of production, the given scenario exemplifies the concept of _____.

entrepreneurship

Melina and Carl want to start an event management company that would provide local artists with a platform to showcase their talent and gain an audience. Melina and Carl are willing to invest their own resources in this project. In the context of factors of production, the given scenario exemplifies the concept of _____.

entrepreneurship

Ethan, an employee in a corporate company, is asked to do a systematic evaluation of the company's adherence to its social and ethical standards. In this case, Ethan should first:

establish the ethics and social responsibility goals that the company seeks to achieve.

Brixbee Inc., a European electronics company, has given a domestic firm in Lougard, an Asian country, the rights to manufacture and market its product within Lougard. In this scenario, Brixbee Inc. is most likely involved in _____.

foreign licensing

Denise is a hard worker, but she has always had differences with her boss, Angela. Angela has recently become more demanding and is often unwilling to provide clarification on project requirements. After many long working days with little job satisfaction, Denise submits her resignation. She knows that her résumé is strong and feels confident that she will find another job. In this scenario, Denise is facing _____.

frictional unemployment

Children's Campground is a summer program for school children. It advertises that there is one counselor for every four children and that several other highly-trained professionals are part of its staff. Children's Campground advertisements indicate that the program relies heavily on its _____ factor to provide its services.

human resources

Irkholm, a South American nation, experiences an economic downturn that leads to an increase in average prices across the country. The situation becomes more serious when average prices increase more than 50% per month. In the given scenario, Irkholm is experiencing _____.

hyperinflation

Cornell Health Care, a renowned American hospital, regularly collaborates with other health-care centers to provide small medical clinics in low-income countries drugs and medical services at lower than normal prices. In this scenario, this practice of collusion by Cornell Health Care is _____.

illegal and ethical

In the context of legal and ethical dimensions of business conducts, embezzling money is:

illegal and unethical.

Providing rock-bottom prices only to distributors in underserved areas is__________.

illegal but ethical

Real gross domestic product (GDP) measures the total value of final goods and services produced within a nation's physical boundaries over a given period of time, adjusted for:

inflation

The U.S. government uses the consumer price index (CPI) and the producer price index (PPI) to evaluate:

inflation

Vertivius, a gaming device manufacturer, entered the gaming market only after conducting a thorough survey of the potential customer base. Vertivius waited for five years before introducing its unique product—the first handheld gaming device—in the market. It introduced this product after ensuring that it would be embraced by the customers. In this scenario, Vertivius:

is a leading-edge firm.

Gander, an apparel company, is known to be a profit-hungry company. It lands in a controversy when it comes to light that the company pays almost nonliving wages to the workers in its manufacturing subsidiaries based in developing countries. In the context of business behavior, Gander's business conduct is:

legal and unethical.

Vandium, a high-end smartphone, is known for its excellent audio quality and processing speed. However, most of its users complain of certain technical issues after a period of five months. The company, however, is well aware of these issues because it deliberately designs these products to fail after a certain period—a strategy to generate revenue through service charges. In the context of business behavior, Vandium's business conduct is:

legal and unethical.

Mora, an American jewelry manufacturing company, wants to import diamonds from Renoria, an Asian country. However, the officials in charge of the trade in Renoria agree to formalize the transaction only if they are paid a certain amount of money for their personal benefit. Since American businesses are prohibited from offering bribes to any foreign nation, Mora has to look to another exporter of diamonds. In the given scenario, Mora is most likely facing the barrier of _____.

legal differences

Mercy's Apparels, a fabric company, was established post World War II with the aim of catering to the demands of consumers looking for affordable quality clothing. To differentiate itself from its competitors, the company developed a distinctive identity as the producer of budget clothing. In the context of the history of American business, Mercy's Apparels was most likely established during the _____.

marketing era

Pride of Peers is a bakery chain that specializes in preparing homemade confectionaries. The company donates most of its earnings to rehabilitation centers for war victims and keeps just enough to buy raw materials. The primary goal of the company is to contribute to the rehabilitation of war victims. In this scenario, Pride of Peers would most likely be classified as a _____.

nonprofit organization

In the context of monetary policy, the Fed is most likely to reduce the discount rate during:

recessions

The economy of Sutanvia is under severe financial distress. However, over the last few months, the economy has gradually picked up, and employment levels are slowly rising back to normal levels. Consumers are also beginning to engage in regular buying activities. In this scenario, the economy of Sutanvia is currently in the _____ phase of its business cycle.

recovery

Andrew, an employee in a corporate company, is asked to conduct a systematic evaluation of how well the company is meeting its ethics and corporate responsibility goals. In the given scenario, Andrew is most likely asked to do a _____.

social audit

Norman Phone Inc. is a leading cell phone manufacturer who recently launched Omn-1 model. Even before the sales of Omn-1 model could reach its peak, the company launched the next version, Omn-2. Omn-2 overtook the sales of the Omn-1 model and also of its competitors' products. This helped Norman Phone Inc. to maintain its position as a leading-edge cell phone manufacturer. This scenario demonstrates the importance of _____ as a key source of competitive advantage.

speed-to-market

Anderson invested $1 million in a company called Ladmen Corp. He, therefore, has a personal interest in the company's profits and its new ventures. Given this information, Anderson is a _____ in Ladmen Corp

stakeholder

David is the chief executive officer of Grand Rocks Mining Company. He has convinced the company's board of directors to implement a change in the mining procedure. According to the new procedure suggested by David, less resources will be exhausted. This will ensure that the ability of future generations to meet their needs is not harmed because of shortage of natural resources. By agreeing to David's suggestion, Grand Rocks has embraced the idea of _____.

sustainable development

Transparency International, a leading anticorruption organization, published its yearly index of "perceived corruption" across 168 countries in 2015. Its findings showed that:

the United States scored lesser than most of the European countries in the index of perceived corruption.

In the context of monetary policy, if the Fed decreases the reserve requirement, _____.

there will be more loans available