Business Exam #1

Which of the following is the broadest indicator of international trade and shows how much is spent on international transactions? A) Trade surplus B) Balance of payments C) Balance of trade D) Economies of scale E) Exchange rate

Balance of payments

Who is responsible for reviewing the long-term plans and major strategic decisions of an organization? A) Board of directors B) External stakeholders C) Institutional investors D) Shareholders E) Philanthropists

Board of Directors

Consumers have the right to buy safe products, and to buy them safely. Who enforces this? A) Consumer Product Safety Commission B) Civil Rights Act of 1964 Board C) Affirmative Action Board D) Equal Employment Opportunity Commission (EEOC) E) Fair Credit Reporting Act Commission

Consumer Product Safety Commission

Which of the following regulatory agencies is responsible for monitoring the hiring practices of companies and can require them to compensate individuals who have been victimized by unfair hiring practices? A) Employee Protection Commission (EPC) B) Equal Employment Opportunity Commission (EEOC) C) Civil Rights Commission (CRC) D) Employment Regulatory Commission (ERC) E) Federal Employment Commission (FEC)

Equal Employment Opportunity Commission (EEOC)

Which of the following strategies is best when attempting to enter a foreign market slowly and then designing the firm's product offerings for that market? A) Business merger B) Exporting C) Foreign direct investment D) Franchising E) Joint venture

Exporting

The ________ is the federal agency responsible for protecting money in customer accounts and managing the transition of assets whenever a bank fails. A) Federal National Mortgage Association B) Federal National Loan Corporation C) Federal Mortgage Corporation D) Federal Home Loan Association E) Federal Deposit Insurance Corporation

Federal Deposit Insurance Corporation

Which of the following acts outlaws payments that are intended to get government officials to break the laws of their own countries or to secure "improper advantage" in gaining or retaining sales? A) Foreign Direct Investment Act B) Federal Corrupt Practices Act C) Theocratic Laws Payment Act D) Economic Globalization Act E) Foreign Corrupt Practices Act

Foreign Corrupt Practices Act

________ limit the amount of particular goods that countries allow to be imported during a given year. A) Import subsidies B) Restrictive import standards C) Embargoes D) Import quotas E) Import tariffs

Import quotas

Which of the following offers investing and advisory services to organizational customers, including governments? A) Thrift bank B) Merchant bank C) Investment bank D) Credit union E) Private bank

Investment Bank

Which factor of production represents the collective intelligence of an organization? A) Human resources B) Natural resources C) Capital D) Knowledge E) Entrepreneurship

Knowledge

________ agreements entitle one company to use some or all of another firm's intellectual property in exchange for a royalty payment. A) Franchising B) Licensing C) Joint venture D) Exporting E) Strategic alliance

Licensing

The ________ establishes procedures for creating geologic repositories of radioactive waste. A) Solid Waste Disposal Act B) Clean Air Act C) Resource Recovery Act D) Toxic Substances Control Act E) Nuclear Waste Policy Act

Nuclear Waste Policy Act

________ involves donating money, employee time, or other resources to various causes without regard for any direct business benefits for the company. A) Philanthropy B) Cap and trade C) Affirmative action D) Sustainable development E) Strategic CSR

Philanthropy

4) ________ is the term used to describe the difference between revenue and expenses. A) Owner's equity B) Profit C) Interest D) Sales E) Economies of scale

Profit

Which of the following is an objective of protectionism? A) Increasing foreign direct investment B) Protecting industries and workers through government policies C) Helping developing nations engage in global trade D) Reducing the purchasing power of individuals E) Enhancing trade between nations

Protecting industries and workers through government policies

________ is money that an organization brings in through the sale of its goods and services. A) Finance B) Revenue C) Competitive advantage D) Capital investment E) Sales

Revenue

________ are politically motivated embargoes that revoke a country's normal trade relations status. A) Quotas B) Subsidies C) Tariffs D) Restrictive standards E) Sanctions

Sanctions

If a country needed help in dealing with a natural disaster, where might they go? A) Area trading blocs B) The World Trade Organization C) The Trans-Pacific Partnership D) The International Monetary Fund E) The World Bank

The International Monetary Fund

Which of the following has been created to promote trade and ensure economic growth of member nations? A) The World Trade Organization B) Multinational corporations C) Trading blocs D) Transnational organizations E) Tax havens

Trading blocs

Which of the following federal legislations limits a credit card holder's liability for unauthorized use? A) Fair Packaging and Labeling Act (1966, 1972) B) Deceptive Mail Prevention and Enforcement Act (1999) C) Fair Credit Reporting Act (1970) D) Truth in Lending Act (Consumer Protection Credit Act) (1968) E) Magnuson-Moss Warranty Act (1975)

Truth in Lending Act (Consumer Protection Credit Act) (1968)

A(n) ________ is a framework of how a business intends to generate revenue. A) profitability analysis B) entrepreneurial mindset C) strategic management tool D) competitive advantage E) business model

business model

Which of the following is a key difference between a corporation and a sole proprietorship? A) Establishing a sole proprietorship has complex legal requirements unlike a corporation. B) Unlike a sole proprietorship, a corporation has limited financial liability. C) Regulatory requirements are less severe for corporations than sole proprietorships. D) Compared to establishing a proprietorship, establishing a corporation is easier. E) Unlike a corporation, a proprietorship is subject to double taxation.

Unlike a sole proprietorship, a corporation has limited financial liability

Two areas of concern with artificial intelligence from an ethical perspective are embedded biases and ________. A) use for security issues B) a lack of transparency and accountability C) lack of simplification D) use of facial recognition software E) limited language processing

a lack of transparency and accountability

In a(n) ________, one company buys a controlling interest in the voting stock of another company. A) acquisition B) limited partnership C) joint venture D) strategic alliance E) consolidation

acquisition

Activities undertaken by businesses to recruit and promote members of groups whose economic progress had been hindered through either legal barriers or established practices are known as ________ programs. A) multiculturalism B) selective recruiting C) sustainable development D) greenwashing E) affirmative action

affirmative action

Governments established ________ in an effort to ensure all competitors have an equal chance of succeeding. A) deregulation legislation B) fiscal policies C) antitrust legislation D) free-market economies E) trusts

antitrust legislation

The Magnuson-Moss Warranty Act (1975) requires complete written warranties in ordinary language and requires warranties to be ________. A) available before purchase B) contained on package labeling C) supported by the retailer D) applicable for a minimum of one year E) supported by the manufacturer

available before purchase

________ refers to the resources or capabilities a company must have before it can start competing in a given market. A) Assets B) Technological requirements C) Barriers to entry D) Economies of scale E) Fixed costs

barriers to entry

The term ________ is used to characterize the fluctuations in an economy's rate of growth over a period of several years. A) microeconomics B) economic repercussions C) competitive pressures D) cyclical machinations E) business cycles

business cycles

Businesses that need very large amounts of money, equipment, or other material resources in order to get started are ________ businesses. A) not-for-profit B) labor-intensive C) competitively-advantaged D) service sector E) capital-intensive

capital-intensive

An S corporation ________. A) does not split the ownership into smaller units B) combines limited liability of a corporation with the federal taxation advantages of a partnership C) combines limited ownership of a proprietorship with the capital-raising options of a corporation D) does not have such advantages as limited liability of investments E) must have over 100 investors

combines limited liability of a corp with the federal taxation advantages of a partnership

Legal systems in Great Britain and the United States are based on ________, in which tradition, custom, and judicial interpretation play important roles. A) civil law B) common law C) theocratic law D) prevailing custom E) tax law

common law

5) ________ refers to some aspect of a product or company that makes it more appealing to target customers. A) Barrier to entry advantage B) Horizontal integration C) Competitive advantage D) Vertical integration E) Economies of scale

competitive advantage

Which of the following is a component of the specific market environment within which each business operates? A) Technological innovations B) Competitors C) Environmental restrictions D) Ethical restrictions E) The speed of granting permits and licenses

competitors

The ________ measures the rate of inflation by comparing changes in the prices of a representative basket of goods and services such as clothing, food, housing, and utilities. A) inflationary stability index (ISI) B) gross domestic product (GDP) C) economic stimulus index (ESI) D) producer price index (PPI) E) consumer price index (CPI)

consumer price index (CPI)

What key aspect of running a business includes the ability to offer valuable goods and services while contributing to society? A) Business mindset B) Corporate social responsibility C) Producing intangibles D) Opportunities in the marketplace E) Vertical integration

corporate social responsibility

When demand for goods and services drops, businesses reduce production, resulting in economic contraction. The unemployment resulting because of this phenomenon is known as ________ unemployment. A) frictional B) intrinsic C) seasonal D) cyclical E) structural

cyclical

Which type of analytics finds patterns in numerical data? A) Predictive analytics B) Data mining C) Text mining D) Machine learning E) Business intelligence

data mining

Which of the following is a characteristic feature of economic contraction? A) Decreased consumer spending B) Increased income C) Decreased unemployment rates D) Increased employment E) Increased demand

decreased consumer spending

Businesses can impact society in both positive and negative ways. Occupying land and displacing existing businesses are examples of ________. A) disrupting communities B) generating pollution C) creating waste D) creating safety risks E) causing financial instability

disrupting communities

Which of the following is one of the ways the government helps to stabilize or stimulate the national economy? A) Changes in supply B) Instituting an oligopoly C) Changing monetary policy D) Adjusting equilibrium pricing E) Eliminating monopolies

eliminating monopolies

Multinational corporations are companies that ________. A) have formed strategic alliances with companies across the world B) establish a physical presence in multiple countries through foreign direct investment C) have formed operational alliances with companies across the world D) procure supplies from multiple countries to improve their production E) export to multiple countries from a central location

establish a physical presence in multiple countries through foreign direct investment

________ verify the financial reports of public companies as required by law. A) Management accountants B) Credit managers C) External auditors D) Internal accountants E) Forensic accountants

external auditors

Which of the following involves changing the government's revenues or expenditures to change the growth rate of the economy? A) Antitrust regulation B) Fiscal policy C) Monetary policy D) Regulation E) Deregulation

fiscal policy

A company that is incorporated in one state but does business in several other states where it is registered is called a(n) ________. A) international corporation B) domestic corporation C) global corporation D) foreign corporation E) holding corporation

foreign corporation

In a ________ strategy, managerial control is highly centralized and major decisions for the company's international operations are made at the company's headquarters in the home country. A) distributed B) global C) franchising D) transnational E) multidomestic

global

Which of the following best describes deregulation? A) Putting rules in place to govern economic activity B) Increasing the revenues to stimulate spending and limiting inflation C) Encouraging all stakeholders to put pressure on organizations to save money D) Adjusting the amount of "spendable" money in the economy at any given time E) Having fewer rules and relying on the market to prevent excesses

having fewer rules and relying on the market to prevent excesses

Which of the following refers to people and their individual talents and capabilities? A) Knowledge B) Natural resources C) Capital investments D) Human resources E) Entrepreneurship

human resources

In the global marketplace, which of the following is often a type of key asset needed to successfully utilize an advantage? A) Supplies B) Intellectual C) Capital D) Production location E) Workforce

intellectual

A disadvantage of the corporate structure is that it ________. A) increases the risk of conducting business B) limits the liquidity that businesses have C) involves strict reporting requirements D) imposes unlimited liability on the owners E) limits the business's ability to raise capital

involves strict reporting requirements

The risk and reward relationship ________. A) is a key aspect of social responsibility B) applies only to service-intensive businesses C) is fundamental to businesses in every modern economy D) is an outdated concept that's been replaced by corporate sustainability E) is essential to the counter-cyclical business model

is fundamental to businesses in every modern economy

In a(n) ________, two or more firms work together to create a new business entity that is legally separate and distinct from either parent company. A) operational alliance B) international franchise C) strategic alliance D) operational partnership E) joint venture

joint venture

________ offer financial services to businesses, particularly in the area of international finance. A) Private banks B) Merchant banks C) Investment banks D) Credit unions E) Retail banks

merchant banks

In a ________, two companies join to form a single entity either by pooling their resources or by one company purchasing the assets of the other. A) limited partnership B) joint venture C) merger D) consolidation E) strategic alliance

merger

Nongovernmental organizations are usually ________. A) firms that apply sustainable business strategies to achieve their business goals B) composed primarily of sovereign states (referred to as member states), or of other intergovernmental organizations C) publicly traded and owned entities D) firms that derive a substantial portion of their income from trade E) nonprofit groups that provide charitable services or promote causes

nonprofit groups that provide charitable services or promote causes

An organization that seeks to operate efficiently and effectively to achieve its goals without focusing on profit as a motive is a ________. A) goods-producing business B) service business C) government-owned corporation D) business intermediary E) nonprofit organization

nonprofit organization

When the number of competitors in a market is small, and competitors influence each other through production and pricing decisions, a situation known as ________ is created. A) monopolistic competition B) duopoly C) pure competition D) oligopoly E) monopoly

oligopoly

The economic system that allows individuals the least degree of economic freedom is ________. A) free-market B) authoritarianism C) planned D) mixed capitalism E) capitalism

planned

What can companies use to protect themselves in long-term purchasing contracts? A) Consumer price index B) Price-escalation clauses C) Gross domestic product rates D) Producer price index E) Inflation rate clauses

price-escalation clauses

________ is the act of designing new and better ways to run a company's operations. A) Facilities B) Purchasing C) Process R&D D) Human resources E) Marketing

process r&d

________ occurs when no single firm is large enough to influence prices and distort the workings of the free-market system. A) Pure monopoly B) Pure competition C) Inflation D) Recession E) Deflation

pure competition

In a publicly held corporation, the board of directors is ________. A) comprised of institutional investors B) the top executives running a corporation C) elected by corporate officers D) representatives of the shareholders E) elected by the employees of the organization

representatives of the shareholders

________ activities are intended to identify new ideas and designs that have the potential to result in new goods and services. A) Human resources B) Operations management C) Accounting D) Research and development E) Information technology

research and development

Population trends that change the composition of consumer markets and the workforce are a part of a company's ________ environment. A) economic B) regulatory C) social D) technological E) political

social

The classic theory of comparative advantage suggests that each country should ________. A) produce a wide range of products to maintain an attractive international portfolio B) produce all goods and services it requires for domestic consumption C) attempt to maintain a trade deficit by importing more than what it exports D) attempt to maintain a trade surplus by exporting more than what it imports E) specialize in those areas where it can produce more efficiently than other countries

specialize in those areas where it can produce more efficiently than other countries

All groups affected by a company's activities are referred to as its ________. A) stakeholders B) suppliers C) shareholders D) customers E) employees

stakeholders

Corporate officers are the ________. A) top executives who run a corporation B) middle level managers of a corporation C) lower level employees of an organization D) people who elect directors of a company E) official representatives of shareholders

top executives who run a corporation