Bus Midterm Understanding Business Ch 1-7

We describe charitable donations by corporations to nonprofit organizations as _________.

corporate philanthropy

Insider trading involves:

investors using private company information to further their own fortunes.

Successful small business owners are:

valuable sources for information since you can learn from their experiences.

The size of the world market is:

6.9 billion

Which of the following statements about the operation of a corporation is correct?

A corporation receives its charter from a state government.

An oligopoly is a market that is characterized by:

A few large sellers who dominate the market.

__________ is lowering the value of a nation's currency relative to other currencies.

Devaluation

__________ is a condition in which the price increases are slowing.

Disinflation

A conglomerate merger will:

Diversify business operations and investments.

When corruption is present in the business environment:

company leaders can threaten competitors and minimize competition.

To improve America's business ethics:

company leaders should adopt and support a corporate code of ethics.

With GDP totaling more than $570 billion, the common market known as COMESCA is:

composed of Southern African and Eastern African nations.

One of the four primary functions of management is:

controlling

A good business plan will:

describe all aspects of the business, including product, the target market, the nature of the competition, any financial resources, and the owner's qualifications.

The new era of business is likely to be dominated by the:

information-based sector.

The first step when facing an ethical dilemma is to ask:

"Is it legal?"

Which of the following is a characteristic of an effective ethics officer?

(S)he has a capacity to serve as a counselor and an investigator.

A sociological challenge that must be overcome in order to be successful in the global market is:

A lack of cultural understanding.

When the market price of a good is above its equilibrium value, and all other determinants are unchanged:

A surplus will exist in the market.

Which of the following should form the foundation of a firm's control system?

Accounting and finance

Which of the following is a characteristic of successful entrepreneurs?

Action-oriented

Which of the following business policies would most likely help a single-parent family?

Allowing family leave and flextime

An evaluation of franchising would conclude that this type of arrangement:

Appeals to people who want to own a business, but are not comfortable starting a company from scratch.

Which of the following statements is the most accurate? Sole proprietorships:

Are taxed at the owner's personal tax rate.

How is the profile of business owners changing?

Businesses owned by minority women are growing at a faster rate than businesses owned by

One of the benefits of a free market is that:

Businesses provide customers with quality products at fair prices.

One reason limited liability companies have become so popular is that they:

Can be taxed either as a corporation or as a partnership, so owners can choose the tax treatment that is most advantageous for their situation.

_____________ is by far the most popular target for American franchisors seeking to establish franchises in other countries.

Canada

Both socialism and communism are variations of:

Command economies

A merger involving a software producer and a clothing manufacturer is an example of a:

Conglomerate merger.

__________ is the management function that involves determining whether an organization is progressing toward its goals, rewarding employees for doing a good job, and taking corrective action when they are not.

Controlling

A separation between ownership and management is most likely to occur in a:

Corporation

The form of business ownership best suited to raising large amounts of money for expansion is the:

Corporation

____________ comprise about 20% of all businesses but account for about 81% of U.S. business receipts.

Corporations

"Double taxation" means:

Corporations pay taxes on their profits. If they distribute after-tax profits to the stockholders, the stockholders also pay taxes on the distribution.

__________ unemployment refers to loss of jobs due to a recession or a similar downturn in the economy.

Cyclical

__________ is choosing among two or more alternatives.

Decision-making

________ refers to standards of moral behavior.

Ethics

Since the beginning of the 1900s, the agricultural sector of the United States has:

Experienced a significant drop in employment, mainly because of tremendous improvements

exporting.

Export Assistance Centers

__________ include dealers, who buy products to sell to others, and ultimate customers who buy products for their own personal use.

External customers

Which of the following would be a topic emphasized in a macroeconomics course?

Factors that determine how fast a nation's economy is growing.

In comparing the types of skills used by managers at different levels within an organization, which of the following is true?

First-line managers use mainly technical and human relations skills, while top managers devote most of their time to activities involving human relations and conceptual skills

Which of the following statements most accurately identifies a limitation of the free-market economic system?

Free-market economies tend to result in unequal distribution of wealth.

basic capitalist rights under:

Freedom of choice.

job.

Frictional

The value of goods imported into France exceeds the value of French exports. This indicates that France:

Has a trade deficit.

Purposefully understating your firm's income to avoid paying higher taxes is an example of:

Illegal behavior.

An unfavorable balance of trade occurs when the value of:

Imports exceed the value of exports

of unemployment - less than 2%), the Fed may decide to:

Increase interest rates.

The main goal of resource development is to find ways to:

Increase the amount of resources and create conditions that will make better use of those

__________ are units within an organization that receive services from other units within the organization.

Internal customers

Which of the following is a reason why a business should be managed ethically?

It is the right thing to do.

The U.S. economic system relies on

Key economic indicators such as GDP, to measure economic progress.

____________ is concerned with finding the right information and making that information accessible and understood by everyone in an organization.

Knowledge management

The S corporation is likely to be less popular in the future because:

Limited liability companies, which do not have the restrictive eligibility requirements of S corporations and offer greater flexibility in the choice of tax treatment, are now legal in all 50 states.

A partner (owner) who invests money in a business, does not take an active role in managing the operation, and is only subject to losing the funds he/she invested.

Limited partner.

Which of the following activities is part of the planning function of management?

Looking at market forecasts to identify future business opportunities and challenges

___________ studies the operation of a nation's economy as a whole.

Macroeconomics

How are managers today different from managers in the past?

Managers today emphasize teamwork

buys from them.

Mercantilism

Under capitalism:

Most of the means of production and distribution are privately owned and operated for

__________ are specific, short-term, measurable results an organization wants to achieve in order to fulfill its long term goals.

Objectives

Compared to the C-corporation, the limited liability company is an attractive form of business ownership because:

Once formed, the limited liability company does not require the firm to hold annual meetings, and has the option to avoid double taxation.

Global franchising offers:

Opportunities for both large and small franchises.

__________ is the management function that involves allocating resources, assigning tasks, and establishing procedures for accomplishing the organizational objectives.

Organizing

A significant disadvantage of owning a sole proprietorship is the:

Overwhelming time commitment often required of the owner.

One of the most significant problems faced by communist nations is:

Persistent shortages of basic goods such as food and clothing.

__________ involves setting the organization's vision, goals, and objectives.

Planning

A simple supply curve shows a relationship between the:

Price of a good and the quantity of that good sellers are willing to offer for sale at a specific

If a shortage exists for a good in a free-market economy, the:

Price of the good will rise.

If global trade experts predict that the value of the dollar will soon fall, it will result in:

Prices of imported goods rising, but prices of U.S. goods sold overseas falling

ingredients, better pizza". The company wants to achieve:

Product differentiation

pizzas produced per worker per hour.

Productivity

including political freedom, safety, education, and a clean environment.

Quality of life

A command economic system is characterized by:

Reliance on the government to determine what is produced and who gets the output.

Which of the following sociocultural forces can have a significant impact on global business operations?

Religion

The most popular type of business for franchising is:

Restaurants

________ tariffs are designed to raise money for the government.

Revenue

Affiliate marketing is a web-based business strategy that:

Rewards individuals who are willing to link a company's website to their blog or social network page.

A __________ analysis is used to help companies evaluate their internal strengths and weaknesses, and develop an awareness of external threats and opportunities.

SWOT

citizens because he believed that:

Significant population growth would result in shortages of food and resources.

Many individuals today believe that ethical behavior is determined by what is best for them at the time. This is an example of:

Situational ethics.

One of the best places for young entrepreneurs to start shopping for a SBA loan is a:

Small Business Development Center.

An entrepreneur who wishes to start a business with little delay or hassle, and who wants to be his or her own boss, should organize the business as a:

Sole proprietorship.

___________ involves recruiting, hiring, motivating, and retaining the best people available to accomplish the company's objectives.

Staffing

The board of directors for a corporation is elected by its:

Stockholders

The organizational structure of a corporation permits:

Stockholders to elect the Board of Directors.

__________ planning determines the major goals of an organization and lays the foundation for obtaining and using resources to achieve those goals.

Strategic

Earnings of C (conventional) corporations can be:

Taxed twice if they are distributed as dividends to stockholders.

____________ skills include the ability to perform tasks of a specific department or job, such as selling (marketing) or bookkeeping (accounting).

Technical

The largest importer in the global market today is:

The United States

To many businesspeople, one of the major attractions of a sole proprietorship is:

The chance to be their own boss.

Retired people will be draining the U.S. economy of wealth. This is due to:

The fact there are not enough workers in subsequent generations to support the ongoing drain

Which of the following is not a disclosure that should be part of a partnership agreement?

The list of personal assets of each partner.

One important consideration when prospecting for a good franchise business is:

The market potential for the product or service, at the prices you need to charge.

Which of the following is a basic right under capitalism?

The right to compete.

rights under:

The right to own private property.

When a sole proprietor dies:

The sole proprietor's heirs have the option of taking over the business.

price change is that:

There is a shortage in the market for apples.

reason why firms may decide to form a joint venture?

They will save time to market if they pool their technological know-how.

Another name for a common market is:

Trading bloc.

Which of the following activities would be a part of the leading function of management?

Training and coaching workers to help them understand their job and perform it effectively

In volume of exports, the three leading nations are:

U.S., Germany, and China.

Three types of corporate mergers are:

Vertical, horizontal, and conglomerate.

Nick wants to start his own business. Nick should consider a sole proprietorship if he:

Wants to be his own boss and can accept unlimited liability.

Which of the following statements describes ethical behavior in the U.S.?

We can find common moral values that many Americans uphold, including respect for human life, self-control, honesty, integrity, and courage.

international trade disputes.

World Trade Organization

Ethnocentricity means:

You believe your culture is superior to others.

n order to create more wealth and provide better services, some nations recognize that _______________.

a good strategy is to minimize interference with the free exchange of goods and services

One reason we have seen continued growth in home-based businesses is:

affordable computer and information technology makes it easier to compete.

Technology affects people in:

all industries.

Enterprise zones are specific geographic areas that:

attract business investment by offering lower taxes and government support for development.

Similar to how large businesses proceed, small businesses make marketing decisions _____________.

before a product is developed or store is opened

Successful entrepreneurs are self-nurturing. This means they:

believe in themselves and their ideas.

Successful entrepreneurial teams:

bring a variety of talent to the business venture.

A detailed written statement that describes the nature of the business, the target market, the firm's competitive advantages, as well as the owner's resources and qualifications is a:

business plan.

An activity which seeks to earn a profit by providing a good or service is known as a(n):

business.

An ethical dilemma refers to a situation where you must:

choose between equally unsatisfactory alternatives.

The green movement is:

concerned with depletion of natural resources and leaving a large carbon footprint

Compliance-based ethics codes:

conform to laws and regulations.

When Bagel Works employs in-store recycling, composting, and uses nontoxic cleaners, Bagel Works is participating in:

corporate responsibility.

In recent years, progressive firms have embarked upon ___________, where they will commit company resources and expertise toward helping-out in emergency type situations.

corporate social initiatives

Entrepreneurs seeking financial support from bankers and potential investors should:

create a detailed business plan to help the bankers and investors understand why this business will succeed.

In order to compete well and gain market share, contemporary businesses are changing to be more

customer-driven

Successful businesses are keenly focused on their:

customers.

The four basic types of unemployment are frictional, structural, seasonal, and:

cyclical.

The first step in the rational decision-making model is to:

define the situation.

people are willing and able to buy in a given time period.

demand

When discussing moral and ethical issues, it is helpful to remember that ethical behavior begins with __________________.

each of us

Taxes and government regulations are part of the ________________ environment of business.

economic and legal

The downsizing that has occurred in recent years has __________ middle managers in many organizations.

eliminated the jobs of some

Leaders

embrace change.

The revolution in management that is currently underway suggests that the most effective managers of the future will:

emphasize team work.

Economics is the study of how a society _________________.

employs resources to produce goods and services and distribute them among competing

A(n) ____________ is a person who assumes the risk of starting a business.

entrepreneur

Two factors of production that seem to contribute the most to a nation's ability to create wealth are:

entrepreneurship and knowledge.

Considering the potential impact on others prior to making a decision is consistent with ________ behavior.

ethical

After developing a code of ethics, it should be communicated to:

everyone with whom the business has dealings.

When working with international firms, U.S. businesses:

expect socially responsible behavior from their business partners.

the government of that country. This takeover is called a(n):

expropriation.

The purpose of the General Agreement on Tariffs and Trade (GATT) is to:

facilitate global trade

A recent study revealed that most Americans have:

few moral absolutes.

CAFTA consists of:

free trade agreement with Costa Rica, the Dominican Republic, El Salvador, Guatemala,

As a business strategy, the strategy behind "dumping" is to ___________.

gain a foothold in a new market

Empowerment means:

giving employees the authority to make decisions.

The concept of free trade means:

goods and services can be traded freely across borders without political and/or economic

To be considered part of a market, an individual must:

have both a willingness to buy and the financial resources needed to buy.

One problem with conducting a social audit is:

how to determine what should be measured and how to calculate the effect on society.

Leadership, coaching, and morale building are all part of a manager's _________ skills.

human relations

When a firm makes use of the SWOT analysis, one of its objectives is to:

identify the things it does well as an organization and the things it needs to improve.

Employers provide tools and technology for their employees in order to:

improve their efficiency and productivity.

A business's size is measured:

in relation to other firms in its industry.

Going green means:

increasing one's initiatives toward a concern for the environment.

One advantage of free trade is:

innovation for new products occurs which keeps firms competitively challenged.

The Small Business Administration's microloan program awards loans to entrepreneurs based primarily on their:

integrity and sound business idea.

A creative person working within a corporation to launch new products and generate new profits is known as a(n):

intrapreneur

The threat of terrorism,

is costly to most firms because it is costly to governments who increase taxes to pay for

The global environment,

is far reaching and affects all the other business environments.

The Small Business Administration defines a small business as a firm that:

is independently owned but not dominant in its industry.

Many Americans define ethical behavior according to the situation in which they find themselves. This suggests that there may be situations where ________ to cheat, steal, or lie.

it might be OK

Trade experts' concerns about trading with China include:

its political system, counterfeiting activities, and human rights abuses.

Which of the following is a factor of production?

knowledge

Corporate values are:

learned by observing the actions of others in the organization.

When starting a small business, it's important to remember:

learning from others and gaining relevant business experience improves the odds for success.

Following an ethics-based approach to decision making will normally lead to:

lower employee turnover.

One difference between managers and leaders is that:

mangers work to achieve stability while leaders embrace change.

One reason why many U.S. small businesses are not involved in exporting is:

many of these firms do not know how to get started.

A ________ refers to people with unsatisfied wants and needs who are willing and able to buy a product or service.

market

Business owners who prefer to maintain their businesses at a manageable size are called:

micropreneurs

Which of the following is considered when calculating a country's balance of payments?

military expenditures

There are some restrictions on freedom of assembly and freedom of speech under a ____________ system.

mixed economy

The outlook for growth in global trade appears to be:

more interesting yet more challenging every day.

Business incubators are usually government-funded facilities intended to:

offer startup firms low-cost office space and basic business services.

Small business employees:

often find more job satisfaction than their counterparts in big business.

Ethical dilemmas in business:

often force us to choose between equally unsatisfactory alternatives.

Strategic planning looks at the organization as a whole, while ________ planning focuses on daily tasks and decisions.

operational

A(n) __________ is used by an organization to show who is accountable for the completion of specific work and who reports to whom.

organization chart

Managers who listen to their subordinates and allow them to participate in decision-making are using the ____________ style of leadership.

participative

One objective of NAFTA is:

promote conditions of fair competition for the three trading partners

In today's competitive environment, good value means:

providing quality products and services at competitive prices.

The two basic types of tariffs are:

revenue and protective

Compliance based ethics codes typically:

rely on laws and regulations outside the firm for guidance.

The total amount of money that businesses take in by selling goods and services is called ________.

revenue

Companies that outsource research and development and design jobs:

run the risk of overseas companies using the information to produce competitive products.

The immigrant population (both legal and illegal) is having a dramatic effect on

schools, hospitals and other services type industries

part of the:

service sector.

Relationships between businesses and among nations,

should be based on fairness, honesty, openness, and moral integrity.

Using the analogy of boulders vs. sand for filling a hole, the textbook points out that:

small businesses can serve niche markets that larger firms do not serve well.

The __________ is the most common form of business ownership.

sole proprietorship

The __________ is usually the easiest form of business to start and end.

sole proprietorship

Enterprise zones are:

specific locations across the U.S. where entrepreneurs can set-up shop and receive tax breaks for operating in these areas

policies and activities of a business represent the firm's:

stakeholders.

firm build competitive market advantages, without sharing the cost of risk.

strategic alliance

The level of management that is directly responsible for assigning specific jobs to workers and evaluating their daily performance is called:

supervisory management.

Increased participation in small business exporting owes credit to ________.

technological advances such as the Internet and PayPal for safely fulfilling orders

Bankers and potential investors are likely to read ___________ first.

the executive summary

A disadvantage of licensing is:

the licensee may decide to use the expertise you have developed, break the agreement, and

As the term "global" become "local", and as we see more opportunities to compete in the global market,

the long-term trend is for most nations to operate as mixed economies.

Autocratic leadership is likely to be effective when:

the organization faces an emergency situation.

A favorable balance of trade occurs when the value of:

the value of imports is less than the value of exports.

Which of the following best describes the outlook for small businesses in international markets?

the world is a larger, and potentially a more lucrative market than the U.S. domestic market

In countries where businesses are government owned:

there is less incentive to work hard.

Although college graduates would prefer to work for socially responsible companies,

they are not in agreement with what it means to be socially responsible.

The reason a professional such as a lawyer or doctor would incorporate his/her business is

to protect his/her other assets with limited liability.

A major premise of a socialist system is:

to reduce the inequality in the distribution of wealth.

As a factor of production, the term capital includes:

tools, machinery, and buildings.

Following an ethics-based approach to decision making will normally lead to higher:

trust and cooperation.

A firm or individual providing financial capital to small businesses in exchange for an ownership stake in the company is called a:

venture capitalist.

A phone call to a government official by an employee of the Enron Corporation disclosed the deception and dishonesty of the firm's accounting records. This employee played the role of a:

whistleblower.