Chapter 1-8 Business 1301 midterm review

Hyperinflation

(blank) refers to an average monthly inflation (or price rise) rate of more than 50%.

Which of the following is a difference between a C corporation and an S corporation?

A C corporation is double taxed, whereas an S corporation is taxed as a partnership.

Which of the following countries has a trade deficit?

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

balance of payments surplus

A balance of payments surplus means that more money flows in than out of a country.

General Agreement on Tariffs and trade

A bold step to lower tariffs and to reduce trade restrictions worldwide. Some countries can even make block treaties that enable almost un-restricted trade.

Which of the following statements is true of a franchisor-franchisee relationship?

A franchisor limits the franchisee's territory from expanding into other areas.

conglomerate merger

A(n)__________is a combination of two firms that are in unrelated industries.

True

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

Sarbanes-Oxley Act

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

Marketing Era

After WW2 businesses began to differentiate themselves from the competition by developing brands, or distinctive identities.

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.

aging population

As the population becomes increasingly older, it presents opportunities and challenges for businesses, making businesses that cater to older demographics more profitable.

audience involvement

Before starting his presentation on the benefits of taxi services, Mark engages the spectators by asking them to imagine themselves driving in a drunken state. He goes on to ask them the possible outcomes that they can imagine.

Independence

Being one's own boss is a huge benefit of starting one's own business. One answers to no one other than oneself and any investors whom one invites to participate in one's business.

Avoid slang

Bill decides to use several jokes and innuendos that are not received well by his supervisors.

High risk of failure

Brian had started a new business venture using majority of his savings. However, his divorce affected him monetarily because of which he had to shut down his business. Which of the following threats is highlighted in the given scenario?

relationship Era

Building on the marketing concept, today, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term relationships.

illegal and ethical

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 _____. You Answered

retained earnings

Corporations often reinvest some or all of their profits back into the business. Shareholders don't pay income taxes on these _______

In the context of business communication, which of the following is a tip for an excellent email?

Do not assume privacy.

In the context of factors of production

Employees and workers can be classified as human resources

Which of the following tips should be considered while writing high-impact business messages?

End sentences with prepositions when it sounds natural.

Energy

Entrepreneurs simply can't succeed without an enormous amount of _____. Six or seven 12-hour workdays are not atypical in the start-up phase of running a business.

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

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:

Even though the growth rates in many high-population countries are strong, most of these nations remain behind the United States in terms of development and prosperity, posing considerable challenges for foreign firms.

Even though the growth rates in many high-population countries are strong, most of these nations remain behind the United States in terms of development and prosperity, posing considerable challenges for foreign firms.

Which of the following statements is true of the formation of general partnerships?

Expert legal assistance can be acquired when drawing up a partnership agreement.

profit and loss statement

Grydon Inc. has applied for a business loan in the United Bank. To best assess the loan case, the loan officer at the bank, Cerejo, decides to look at the company's net income. Cerejo will find this information in Grydon's _____.

He is confident but not overconfident regarding his abilities.

Howard is a young entrepreneur who is invested in creating a new form of social media. He is sure of his idea and believes that it will be successful in the long run. However, he is careful not to be overoptimistic about it and works on other ideas as well. In the given scenario, which of the following statements is true of Howard?

organizational barrier

However, she does not get the opportunity to do so because of a high power distance in the company. In the given scenario, Callie faces a(n) _____.

human resources

Human resources encompasses the physical, intellectual, and creative contributions of everyone who works within an economy.

Which of the following is a drawback of buying a franchise?

If the national brand suffers, so does the business.

trade surplus

If the total value of exports is higher than the total value of imports, the country has a

trade deficit

If the total value of imports of a country is higher than the total value of its exports, the country has a (blank)

Which of the following is a difference between limited partnerships and limited liability partnerships?

In limited liability partnerships, all the partners actively participate in the management of the company, whereas in limited partnerships, only the general partners actively manage the company.

necessity entrepreneurs

In low-income countries, a high percentage of entrepreneurs are considered__________.

nonverbal communication

In the context of active listening, one of the dos for better listening is the use of _____.

equal to the amount of financing provided by owners plus the amount provided by creditors to purchase those assets.

In the context of balance sheets, the accounting equation tells us that the value of a firm's assets must be:

financial budget and the operating budget

In the context of budget preparation, the master budget of a firm organizes the _____ into a unified whole.

It begins and ends with preparation.

In the context of creating and delivering successful verbal presentations, which of the following statements is true of dynamic delivery?

It is a formal, long-term agreement.

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

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 demand curve?

U.S. Small Business Administration

In the context of funding options for small businesses, the__________assists entrepreneurs by partially guaranteeing loans from local commercial lenders.

It includes foreign borrowing and lending.

In the context of global trade, which of the following statements is true of balance of payments?

there will be more loans available

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

credit becomes tighter

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, _____. Correct!

sells

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

revenues

In the context of the income statement of an organization, accountants use accrual-basis accounting when recognizing _____.

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

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

Angel investors are wealthy individuals, whereas venture capital firms are companies.

In the context of various funding options for small businesses, which of the following statements is a difference between angel investors and venture capital firms?

The competitive Environment

Is affected the most from getting current customers to buy more of your product. this is much less expensive than getting new customers for the first time.

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

It is a drive that supports contribution to nonprofits through cause-related marketing.

which of the following statements is true of exporting?

It is the most basic level of international market development.

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.

Which of the following is a difference between limited liability companies (LLCs) and corporations?

LLCs are subject to fewer reporting requirements than corporations.

a loan

Lois wants to start an art gallery. However, because of lack of adequate funds, she decides to borrow money from a bank. The bank is hesitant to give money to Lois because it cannot verify whether her business would be able to earn enough profit to repay the borrowed amount within the stipulated period. However, after a thorough research, the bank grants her the money. In the given scenario, Lois uses _____ to fund her business.

inflow of innovation

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?

Language barriers

Mark uses jargon that makes it difficult for Fiola to comprehend the theory. In this scenario, which of the following communication barriers is most likely interfering with Fiola's understanding of the theory?

avoiding bias

Maverk, a human resources manager at a multinational company, has to explain the ethical policies of the company to a batch of new employees. To convey that the company has a low power distance, he says, "The manager who loses his temper must apologize." From the given statement, it can be inferred that Maverk does not follow the business communication guideline of _____.

stockholders

Ownership of C corporations is represented by shares of stock, so owners are called

In the context of limited partnerships, which of the following is an aspect that differentiates limited partners from general partners?

Participation in the management of a company

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

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

Speed-to-market

Rate at which a firm transforms concepts into actual products.

Assets

Resources owned by a firm are known as

personal resources

Ruben used most of his savings to fund this venture and also borrowed funds from his friends and family. In the given scenario, Ruben used _____ to fund his business.

providing personal customer service

Rudy, a food truck owner, has sizable followers on his website where he personally interacts with them and thanks them for their support. He also lets his followers know his location and the menu for a day in advance. The opportunity of _____ is highlighted in the given scenario.

Scope _ emissions are emissions that occur outside a company's boundary, but over which it has some control.

Scope 3

Which of the following is an advantage of a C corporation?

Shareholders have limited liability in the firm.

In the context of creating and delivering successful verbal presentations, which of the following is a tip for dynamic delivery?

Slow down and listen to yourself.

banks obtaining funds at a lower cost.

The Fed intervenes and improves the situation by reducing the discount rate. This move by the Fed will result in: Correct!

Inflation

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

activity-based costing

The first stage in is to identify specific activities that create indirect costs and determine the factors that drive the costs of these activities.

the fiscal cliff.

The fiscal cliff is a package of draconian across-the-board spending cuts and sharp tax hikes scheduled to dramatically decrease the U.S. budget deficit.

$40 million

The owners' equity of Senesta Corp., an event management company, adds up to $23 million, and its liabilities add up to $17 million. Based on the accounting equation, the assets of Senesta Corp. are worth _____.

supply

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

In the context of accounting, which of the following best defines cost?

The value of what is given up in exchange for something else

In the context of owners' equity, which of the following is true of retained earnings?

They are accumulated earnings reinvested in a company rather than being paid to the owners.

Which of the following is a characteristic of limited liability companies (LLCs)?

They are made to pay an annual franchise tax in many states.

Which of the following is an advantage of limited liability companies (LLCs)?

They can have any number of owners.

diversity

US becomes more diverse every day, but Hispanic Population is projected to double by 2043. Businesses that cater to young hispanics are looking at this.

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.

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:

deflation

When prices actually decrease, the economy is experiencing (blank)

Texting

Which of the following communication channels should ideally be used when the content is uncontroversial and a quick response regarding relatively simple issues is required?

Memo

Which of the following communication channels should ideally be used when you must communicate lengthy or detailed uncontroversial information?

In-person presentation

Which of the following communication channels should ideally be used when you need to reach a large audience with an important message?

Vitalizing inner cities

Which of the following is a powerful contribution made by small businesses to the U.S. economy?

Which of the following statements is true of activity-based costing (ABC)?

Which of the following statements is true of activity-based costing (ABC)?

profession

While analyzing your audience to find the right words for a business presentation, the _____ of the audience should be considered

John is an American who exports goods to Europe.

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

Personal credit cards

With her high appetite for risk, Mabel can apply for _________ with her banker. A personal credit card can be an especially handy— though highly risky

The negative halo effect

____ is a disadvantage of franchising for a franchisee?

venture capital firm.

_____ fund high-potential new companies in exchange for a share of ownership, which can sometimes be as high as 60%.

sole proprietorship

______ are just extensions of their owners, they lack permanence. If the owner dies, retires, or withdraws from the business for some other reason, the company legally ceases to exist.

limited partner

______ cannot actively participate in the management of the business, but they have the protection of limited liability.

limited liability company

______ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.

a flexible budget:

_______ is designed to show the appropriate budgeted level of costs for each different level of sales.

Self-reliance

_______ seems to come with an internal locus of control, or a deep-seated sense that the individual is personally responsible for what happens in his or her life.

venture capital firm

________ fund high-potential new companies in exchange for a share of ownership, which can sometimes be as high as 60%.

current liability

________ is a debt that comes due within a year of the date on the balance sheet.

Net income

__________is the profit or loss a firm earns in the time period covered by the income statement.

balance sheet

a financial statement that reports the financial position of a firm by identifying and reporting the value of the firm's assets, liabilities, and owners' equity.

a carve-out.

a firm converts a particular unit or division into a separate company and issues stock in the newly created corporation. It sells the stock to outside investors, thus raising additional financial capital.

Limited liability partnership

a form of partnership in which all partners have the right to participate in management and have limited liability for company debts.

business plan

a is formal document that describes a business concept, outlines core business objectives, and details strategies and timelines for achieving those objectives.

frictional unemployment

a job loss that occurs when employees voluntarily resign. It tends to be ultimately positive.

recovery

a period of rising economic growth and increasing employment following a contraction. Businesses begin to expand. Consumers start to regain confidence, and spending begins to rise.

social audit

a systematic evaluation of how well a firm is meeting its ethics and social responsibility goals. See 4-6:

Dynamic delivery

a vibrant, compelling presentation style that grabs and holds the attention of the audience.

Consumerism

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

assets = liabilities + owners' equity.

accounting equation

diversity

affects the workforce

A strategic alliance

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

capitalist economy

an economic system based on private ownership, economic freedom, and fair competition.

stakeholder

are any groups that have a stake—or a personal interest—in the performance and actions of an organization.

In the context of opportunities and threats, overhead costs for small businesses:

are often lower than big companies.

In the context of the U.S. economy, small businesses:

are often the first to contract when times are tough.

The three kinds of basic financial statements that are prepared in financial accounting are:

balance sheet, income statement, and statement of cash flows.

a startling statistic

begin a presentation on a project by sharing a lesser-known fact about the issue that the project focuses on.

operating budget

budgets that identify projected sales and production goals and the various costs a firm will incur to meet these goals.

physical barriers

can range from a document that looks like a wall of type, to a room that's freezing cold, to chairs in your office that force your visitors to sit at a lower level than you.

gender bias

consists of words that suggest stereotypical attitudes toward a specific gender.

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

crippling shortages and surpluses.

In the context of balance sheets, accounts receivable is an example of__________.

current assets

Small business start-ups are likely to find that getting commercial loans are:

difficult because lenders are reluctant to give loans to firms that do not have a track record.

Economic Environment

economic factors that affect consumer purchasing power and spending patterns

whistle-blower

employees who report their employer's illegal or unethical behavior to either the authorities or the media.

Selling expenses

expenses such as salaries and commissions to salespeople and advertising expenses.

When the Fed reduces the discount rate, banks will have to obtain funds at a higher cost

false

Leading edge firm

firms that offer products right when the market is ready for them.

Videoconferencing

has a high channel richness, and especially with state-of-the-art equipment, it conveys much of the richness of actually being there.

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

citizenship

includes contributing to the community, protecting the environment, and cooperating whenever feasible.

(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.

Free Trade

international trade free of government interference

a joint venture

involve two or more companies joining forces—sharing resources, risks, and profits, but not merging companies—to pursue specific opportunities.

foreign licensing

involves a domestic firm granting a foreign firm the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.

cyclical unemployment

involves layoffs during recessions.

the balance of trade

is a basic measure of the difference between a nation's exports and imports

Balance of payments

is a measure of the total flow of money into or out of a country.

A relevant simile

is an effective hook at the opening of a presentation. If the opening of your presentation hooks your audience, you've boosted the likelihood that you will hold their attention throughout the presentation

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.

Technological tools such as the Internet and email have:

made it easy for small business owners to manage their firms on the go.

cause-related marketing

marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit.

Gross Domestic Product

measures the total value of all final goods and services produced within a nation's physical boundaries over a given period of time.

bottom-up budgeting?

middle and first-line managers are likely to be more highly motivated to achieve budgetary goals when they have a say in how those goals are developed.

Access to factors of production

most likely to have influenced Grettzee's decision to import raw materials from Resumbro. International trade offers a valuable opportunity for individual firms to capitalize on factors of production that simply aren't present in the right amount for the right price in each individual country.

Technological Environment

new technologies, creating new product and market opportunities. Advances in the Technological World to make businesses more streamlined.

spin-off

occurs when a company issues stock in one of its own divisions or operating units and sets it up as a separate company—complete with its own board of directors and corporate officers.

Nonprofit Organization

organizations that do not make profits. Focusing on areas such as health, human services, education.

entrepreneurship

people who take the risk of launching and operating their own businesses, largely in response to the profit incentive.

sustainable development

refers to doing business to meet the needs of the current generation without harming the ability of future generations to meet their needs.

carbon footprint

refers to the amount of harmful greenhouse gases that a firm emits throughout its operations,

age bias

refers to words that suggest stereotypical attitudes toward people of specific ages. In American culture, older people tend to experience negative age bias much more often than younger people

corporate responsibility

relates closely to philanthropy but focuses on the actions of the business itself rather than donations of money and time.

In the case of C corporations, shareholders don't pay income taxes on__________.

retained earnings

excessive regulation

something that affects business start ups

A tariff

taxes levied against imports.

recessions

the Fed is most likely to reduce the discount rate during:

open market operations

the Fed's most frequently used tool to expand and contract money supply. These operations involve buying and selling government securities, which include treasury bonds, notes, and bills.

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.

profit and loss statement

the financial statement that reports the revenues, expenses, and net income that resulted from a firm's operations over an accounting period.

business format franchise

the franchisor grants the franchisee the right to both make and sell its good or service

distributorship

the franchisor makes a product and grants distributors a license to sell it

debt ceiling

the maximum amount Congress lets the government borrow.

Offshoring

the most costly form of foreign direct investment?

statutory close corporation.

the number of stockholders is limited. (The number varies among states but is usually no more than 50.) But all owners can actively participate in management while still having limited liability.

Buying an established business is a better plan than starting your business from scratch because:

the organizational structure is in place.

Ethics

the principles of right and wrong that guide an individual in making decisions

The value of the second-best choice

the value of the production that a country gives up in order to produce the first product

To strike the right tone while writing a business message, it is suggested that an individual:

uses the active voice to facilitate concise communication.

angel investor.

wealthy individuals who invest in promising start-up companies for one basic reason: to make money for themselves.

Power plants

which of the following is an example of an energy infrastructure in a country?