Business ch.1-7

Functions of the Fed

-regulates financial institutions -provides banking services for both gov. and bank -sets and enforces rules of conduct for banks and oversees mergers and acquisitions to ensure fairness and compliance w/ gov. policy

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

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

Airports

Which of the following countries most likely has a comparative advantage?

An Asian country that produces quality automobiles with little opportunity cost compared to other countries

Melvin and Neil run a pawnshop in their neighborhood. They offer loans to individuals in exchange for personal items of higher or equal value, which are used as collateral. If an individual is unable to repay the loan, Melvin and Neil then sell these items at higher rates. In this scenario, Melvin and Neil's pawnshop is an example of a _____.

Business

​Cella, a clothing manufacturer, has licensed Crux Corp. to market and sell its products. This is an example of a _____.

Distributorship

Meria Het, a footwear company, designs formal and casual footwear for White American women. However, to increase its customer base, it introduces a line of footwear for Chinese women in the United States, even though they form only a small market in the country. Which of the following dimensions of the social environment does this scenario exemplify?

Diversity

Debbie, along with Mick and Rory, decided to start a new catering business. She invested her time, money, and efforts in the project, and she directly managed the business development process. In this scenario, Debbie is most likely a(n)

Entrepreneur

In the context of the history of American business, the _____ emerged in the second half of the 1800s, by building on the foundation of the industrial revolution.

Entrepreneurship era

_____ refers to selling products in foreign nations that have been produced or grown domestically.

Exporting

The Global Entrepreneurship Monitor (GEM) shows that people living in high-income countries tend to be much more willing to start their own businesses than people who live in low-income countries.(true of False)

False

​Rudy owns a small metal fabrication business that employs 23 workers. As the owner of a small business, one of the major advantages that Rudy will enjoy when competing against larger firms will be a lesser burden of complying with government regulations. (true or False)

False

During the production era, managers focused mostly on customer satisfaction and not on production efficiency.(true or false)

False, During the production era, managers focused on efficiency, and the customer was an afterthought

​The best employers do not go beyond the law when it comes to providing a good working environment to employees.(True or false)

False, Socially responsible employers go far beyond the law. They create a workplace environment that respects the dignity and value of each employee. They ensure that hard work, commitment, and talent pay off.

​It is possible to establish a corporation by a simple verbal agreement.(True or false)

False, The formation of a corporation requires filing articles of incorporation and paying filing fees. It also requires the adoption of corporate bylaws.

The value of all natural resources tends to rise with low demand, high supply, or both.(true or false)

False, The value of all natural resources tends to rise with high demand, low supply, or both

Socialism is an economic system that encourages privatization and believes that all enterprises should be publicly owned.(True or False)

False, socialism is an economic system based on the principle that the gov. should own and operate key enterprises that directly affect public welfare.

_____ is the authority granted by a domestic firm to an overseas firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.

Foreign licensing

_____ refers to the unrestricted movement of goods and services across international borders.

Free trade

The basic mission of the _____ is to promote global economic cooperation and stable growth.

International Monetary Fund

Which of the following statements best describes the role of the government in a capitalist economy?

It monitors the competition to ensure compliance to regulations.

Alice, the global marketing director of a multinational electronic goods manufacturing firm, is assigned the task of expanding her firm in new markets. She learns that hiring labor is expensive and that the required technical manufacturing equipment is unavailable in the international market. In this scenario, which of the following is most likely affecting the global trade of Alice's firm?

Limited access to factors of production

How do nonprofit organizations play a critical role in an economy?

Nonprofits contribute to economic stability and growth, they provide jobs and their fundamental goal is to contribute to the community rather than personal financial gain.

​What is nonverbal communication? List and define the four types of nonverbal communication.

Nonverbal communication is a form of communication without the use of words. Common forms include eye contact, tone of voice, facial expressions, and gestures and posture. When communicating with a subordinate, a superior, or a peer eye contact indicates trust, integrity, and respectful attention. Your tone of voice can also encourage or discourage your audience to stay with your message. Facial expressions are also a way people communicate by the emotion they show. Someone's gesture and posture can speak for them, so for people who want to increase the power of their message their posture should be confident, open, and coherent.

In the context of supply and demand, which of the following statements is true of the free market system?

People tend to buy more products with lower prices.

What are the characteristics of entrepreneurs?

People who risk their time, money, and other resources to start and manage a business

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

Texting

Define and Explain the functions of the World Trade Organization (WTO). Although the United States played a central role in developing the WTO, the current administration is threatening to leave the organization. In what ways has the United States economy been negatively affected by the WTO? In your opinion, should the U.S. stay and try to reform the organization or leave and develop our own set of trade rules?

The WTO is a permanent global institution that promotes international trade and settles international trade disputes. The WTO also monitors provisions of the GATT agreements, promotes further reduction of trade barriers, and mediates disputes among the members. The U.S has been negatively affected by the WTO because of the unfair distort of prices worldwide. In my opinion the U.S should stay and try to reform the organization.

If you had the opportunity to start a business by entering a franchise agreement, what advantages and disadvantages would you have to consider as the franchisee? In other words, what benefits would you receive versus the costs when compared to starting a business from "scratch" (please outline a minimum of three pros and three cons)

The disadvantages of entering a franchise agreement as the franchisee include the initial franchise fee that I must pay, lack of flexibility and freedom, and the restriction of selling the franchise to other investors. On the other hand the advantages include having that training and support from the franchisor, as well having a brand that is recognizable because it can help with attracting customers. Not only that but it gives me an easier access to funding.

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 capitalism, describe the four degrees of competition with examples of each.

The four degrees of competition include pure competition, monopolistic competition, oligopoly, and monopoly. Pure competition is when there are many competitors selling virtually identical products. An example of pure competition would be agriculture-corn is basically corn- and since customers wont distinguish one product from another no single producer has any control over the price. Monopolistic competition is the market structure with many competitors selling differentiated products. Examples of monopolistic competition include the clothing industry and the restaurant business. An Oligopoly is when there are a handful of competitors selling products that can be either similar or different. Examples of oligopolies include the retail gasoline business, the car manufacturing business, and the soft drink industry. A Monopoly is a market structure with one producer completely dominating the industry, leaving no room for significant competitors. Even though Microsoft is not an actual monopoly it was convicted of monopolistic practices that undermined fair competition.

Capital, one of the factors of production, includes machines, tools, buildings, information, and technology.(true or false)

True

Dominic feels that an incredible string of bad luck has affected his personal life. He also feels that his boss is subjecting him to unfair treatment at work for no fault of his own. Dominic's perceptions suggest that he has an external locus of control.

True

In the context of capitalist economy, the right to free choice directly feeds competition.(true or False)

True

Unfair business practices such as predatory pricing hinder capitalism from achieving its potential.(true or false)

True

Value is the relationship between the price of a good or a service and the benefits that it offers its customers.(true or false)

True

​Stakeholders are any groups that have a stake—or a personal interest—in the performance and actions of an organization.(true or false)

True

The Federal Trade Commission:

actively promote fair competitive practices, which help give every enterprise a chance to succeed.

A(n) _____ refers to a group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations.

common market

Unless they face major trade barriers, the industries in any country tend to produce products for which they have a _____, which means that they tend to turn out those goods that have the lowest opportunity cost compared to other countries.

comparative advantage

During a period of inflation in the United States, the Federal Reserve sells treasury bonds. Buyers of these bonds write checks to the Fed, and the Fed cashes these checks from banks. Given this information, the banks will most likely:

cut back on the loans they make.

Lefrada, a luxury watchmaker, stops production for three months and lays off 30 employees because of a sharp decline in its sales during the period of recession. In the given scenario, the laid off employees are facing _____.

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 the government plans to implement. In this scenario, the government has asked the Congress to hike its _____.

debt ceiling

CuberTech, an American electronics company, set up its production facilities in Chuaga, an Asian country, because the workers in Chuaga work for about one-third the pay of American workers. This substantially lowered CuberTech's cost of production. This scenario is an example of _____.

direct investment

A general partnership avoids the problem of _________ endemic to corporations.

double taxation

In a business cycle, the _____ is a period of robust economic growth and high employment.

expansion

In the context of federal debt, if spending is lower than revenue, the government incurs a budget deficit.(true or false)

false

Compared to the United States, China and India have:

higher gross domestic product (GDP) growth rates. Even though U.S. consumers clearly have money, China and India represent a much bigger opportunity in terms of both sheer size and economic growth.

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.

To achieve its basic mission of promoting international economic cooperation and stable growth, the International Monetary Fund (IMF):

lends money to member nations.

​In communication, the term _____ refers to any interference that causes the message one sends to be different from the message one's audience understands.

noise

When a country produces more of one good, it must produce less of another good (assuming that resources are finite). The value of the second-best choice—the value of the production that a country gives up in order to produce the first product—represents the _____ of producing the first product.

opportunity cost

The arguments for and against trade restrictions are called _____.

protectionism

In the context of international trade restrictions, _____ are limitations on the amount of specific products that may be imported from certain countries during a given time period.

quotas

In a business cycle, the _____ is the transition period between contraction and expansion.

recovery

In the context of the relationship era, leading-edge firms believe that

satisfied customers can promote their business with more speed than promotional campaigns.

Olivia is a part-time worker at a jam-producing company in her village. Her job entails picking and cleaning grapefruits. Because grapefruits grow only in winter, Olivia is unemployed for most part of the year. In the given scenario, Olivia's unemployment exemplifies _____.

seasonal unemployment

Bresnee, a European automobile company, plans to sell its automobiles in Lador, an Asian country. To do this, Bresnee has to make certain modifications in its marketing strategy such as using the regional language of Lador in its advertisements. Without such changes, Bresnee would not be able to establish a market in the country. In the given scenario, Bresnee is most likely facing the barrier of _____.

sociocultural differences

In the context of international trade, India, China, and the Philippines attract multibillion-dollar investments because:

they have a large cohort of technically skilled university graduates who work for about one-fifth the pay of comparable American workers.

In the context of key economic considerations when entering a foreign market, the energy infrastructure in a country most likely includes _____.

utilities

​Xavi develops a cell phone battery that can be charged by a solar panel and can run efficiently for up to three hours. His friends point out that it would be difficult to get cell phone manufacturers to adopt this new technology and that it could take a long time for people to start relying on it. However, Xavi is convinced that he can make his idea popular and successful. He plans to start a new company called EnerMob Inc. that would promote and sell the cell phone battery to the public. In this scenario, Xavi is said to be demonstrating _____.

vision

A person who reports illegal or unethical behavior within an organization is known as a(n) _________.

whistle-blower

​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 is a similarity between venture capital firms and angel investors?

​Both invest in start-up companies with high growth potential in exchange for a share of ownership.

​_____ includes all business donations to nonprofit groups, including both money and products.

​Corporate philanthropy

​U.S. corporations are forbidden to offer bribes since 1977 under the _____.

​Foreign Corrupt Practices Act

​Identify a true statement about dynamic delivery.

​It begins and ends with preparation.

​Which of the following is an advantage of starting a business from scratch?

​One does not have to deal with the prior owner's bad decisions and mistakes.

​Identify the type of communication barrier that arises when operational managers are not allowed to communicate with the senior managers or the top-level management in a firm?

​Organizational barrier

​Which of the following aspects of a limited partnership differentiates general partners from limited partners?

​Participation in management of a company

​Which of the following statements is true of business emails?

​Response to emails should be as prompt as possible.

​Which of the following is a tip for dynamic delivery?

​Slow down, listen to yourself, and stick to your allotted time.

​Which of the following should ideally be followed in one's presentation?

​Tell the audience the key points before launching into the body of the presentation.

​Which of the following is a disadvantage of franchising?

​The franchisee has no flexibility as it is required to follow the franchisor's procedures to the letter.

​Which of the following would be an example of a corporation?

​The owners of Octave Inc. are not personally responsible for the debts and obligations of the firm.

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

​The shareholders have limited liability in the firm.

​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 the purpose of a written code of ethics?​

​To provide guidance to help employees make sound ethical decisions across a range of situations

​The individuals who are elected by stockholders of a corporation to represent their interests are known as _____.

​a board of directors

​A corporation is a form of business ownership in which:

​a business is considered a legal entity that is separate from its owners.

​A sole proprietorship is a form of business ownership in which:

​a single owner actively manages a company.

​Before beginning her presentation, Niharika told her audience she would answer questions at the end of her presentation. Vincent walked in late during the presentation and began asking her questions. The ideal way for Niharika to handle this is by:

​advising Vincent and reminding the audience that there is plenty of time for questions at the end.

​Iris has been told by her boss that the company is planning to lay off some people and that only one employee in her department will be retained. In order to keep her job, Iris has to sabotage the professional image and good work of her colleagues or she will be laid off. This situation is an example of _____.

​an ethical dilemma

​Damien is a programmer in a software firm. He has recently received a promotion and an annual bonus. He believes that this is a result of random luck as he does not work very hard. Damien has _____.

​an external locus of control

​A Franchise Disclosure Document:

​contains information about every aspect of the franchise agreement.

​Treslex, a 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 in order to accommodate demanding training schedules. This is an example of _____.

​corporate responsibility

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

​difficult because commercial lenders are reluctant to give loans to firms that do not have an established record of successful performance.

​While raising start-up funds from friends and family, it is:

​essential to keep the relationship as professional as possible.

Loren LLC is a small bicycle store that competes effectively with much larger companies since it focuses exclusively on selling bicycles for senior citizens and orthopedic patients. The company has been successful since it has:​

​exploited a small but profitable market niche.

​A(n) _____ type of communication channel has the highest level of channel richness and is used when the message is personal, emotional, or high-priority.

​face-to-face meeting

​Technological developments over the past two decades, such as the rise of the Internet and email, have:

​given small business owners more flexibility in business management.

​A partnership:

​is a voluntary agreement under which two or more people act as co-owners of a business for profit.

​The primary reason many people become entrepreneurs is to:

​make more money.

​During the English class, Ingrid was having difficulty paying attention to the presentation given by his professor as the classroom was too cold and his table was creaking. In this case, the cold and the table are both _____ to communication.

​physical barriers

​A clothing company, Patagonia, Inc., pledges one percent of its annual revenue to environmental causes around the world. Founders of the company believe they have an obligation to contribute to the world. This is an example of _____.

​social responsibility

​In challenging business decisions, a true ethical dilemma occurs when:

​someone is forced to choose among bad options.

​Miguel has an idea for a new project management software application that will enhance the efficiency of his unit's operations. His supervisor has asked him to present his ideas to the entire unit. Miguel is excited about the opportunity, but also a little nervous because he has never given a presentation in public before. In order to reduce his speech anxiety, Miguel should _____.

​take a sip of water, send himself positive messages, and visualize success

​Consumerism is a widely accepted social movement. Proponents of this movement believe that _____ is a right of all consumers.

​the right to be informed

​A key reason most sole proprietorships remain relatively small is that:

​they have limited ability to raise the funds necessary to finance growth.

​A key to a successful dynamic delivery is to:

​vary your voice, expressions, and body language.