Midterm 3
What is the best definition of entrepreneurship?
Accepting the risk of starting and running a business
According to recent U.S. Census Bureau research volunteerism is at an all time high, but
3 out of 4 citizens do not give any time to the communities in which they live
The definition of______ advantage is the advantage that exists when a country has a monopoly on producing or is able to produce something more efficiently than all other countries.
Absolute
Ease of starting and ending a business
All you have to do to start a sole proprietorship is buy
What type of business relationship benefits both a trainee and a business owner and occurs when a trainee is hired to learn small-business management while assisting the owner in getting daily work done?
Apprenticeship
True or false: Partnerships are less likely to survive than sole proprietorships.
False
The definition of ______ states: the difference between money coming into a country (from exports) and money leaving the country (from imports) plus money flows coming into or leaving a country from other factors such as tourism, foreign aid, military expenditures, and foreign investment.
Balance of payments
One company's purchase of the property and obligations of another company is a(n)
Buyout
What are advantages of a limited liability companies?
Choice of taxation Flexible ownership rules Limited liability
A regional group of countries with a common external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members is the definition of______
Common market
Which code of ethics emphasizes preventing unlawful behavior by increasing control and penalizing wrongdoers?
Compliance-based ethics codes
In what way will globalization impact U.S. businesses?
Concerns for product safety Loss of jobs in manufacturing Increased competition
The joining of firms in completely unrelated industries is a -blank- merger
Conglomerate
A foreign country's production of private-label goods to which a domestic company then attaches its brand name or trade mark is called______.
Contract manufacturing
More personal -blank- service and the ability to respond quickly is an advantage for small businesses.
Customer
When implementing a new ethics program, businesses must also communicate the changes to outside parties such as:
Customers
By buying more than it has sold, making the value of its exports less than its imports, the United States faces a trade -blank-
Deficit
Micropreneur
Desire to remain small and balance lifestyle with work.
What are some of the disadvantages of a corporation?
Double taxation Cost of forming a corporation
Select the characteristics of an entrepreneurial team that will be developing and marketing a new product.
Each from different areas of business Members have complementary skills and are creative A group of experienced people
Sole Propietorship advantages
Ease of starting and ending the business Ability to be your own boss Pride of ownership Leaving a legacy Retention on company profits No special taxes
Select the reasons why size is an advantage of the corporation.
Easier to raise capital to acquire the latest equipment Easier to raise funds to build modern facilities Easier to attract experts for hire
Which of the following are considered major hurdles to successful global trade?
Economic and financial forces Legal and regulatory forces
True or false: In a limited partnership, the liability of the limited partners is unlimited and personal assets are at risk.
False
______ refers to accepting the risk of starting and running a business.
Entrepreneurship
US business people are often accused of -blank-, an attitude that your own culture is superior to other cultures
Ethnocentricity
Goods or services from the U.S. can be -blank- to many countries for different uses, such as snowplows to clear sand from driveways in Saudi Arabia.
Exported
When the value of a currency is fixed by supply and demand it is the system known as
Floating exchange rate
-blank- is the buying of permanent property and businesses in foreign nations.
Foreign direct investment
A company in another country that is owned by a U.S. company would be an example of a ______.
Foreign subsidiary
A contractual agreement in which someone with a good idea for a business sells others the rights to use a business name and sell a product or service in a given territory in a specified manner is a(n) -blank-.
Franchise
What form of business ownership is a contractual agreement whereby someone with a good idea for a business sells others the rights to use the business name and sell a product or service in a given territory in a specified manner?
Franchising
The definition of _blank _ states: the movement of goods and services among nations without economic or political barriers.
Free Trade
What motivated the unethical behavior of real estate agents, lenders, and borrowers that led to the financial crisis of 2008?
Greed
Which of the following countries are members of the Central American Free Trade Agreement (CAFTA)?
Guatemala Honduras Nicaragua Costa Rica
Which of the following are functions of export assistance centers (EACs)?
Hands-on exporting assistance Trade-finance support
A merger of two firms in the same industry that allows the companies to diversify or expand their products is a(n):
Horizontal
A limit on the quantity of products in a certain category that a nation can import is called a(n) ______.
Import quota
The expansion and development of the Internet has sprouted a world of small web-based businesses. This, among other reasons, may explain why online sales are rapidly:
Increasing
According to a recent study, offering low-cost offices with basic services to new businesses in the early stages of development results in an 87% success rate of -blank- graduates.
Incubator
Which are considered disadvantages of incorporating?
Initial Cost Extensive paperwork Double Taxation
Which set of ethics codes defines an organization's guiding values, creates an environment that supports ethically sound behavior, and stresses shared accountability?
Integrity-based ethics codes
aryn and Eilysh have decided to form a partnership. Taryn will not have management responsibility, but will invest money in the business. Taryn will be considered a(n) -blank- partner.
Limited
When two or more companies, often from different countries, join together to take on a major project it is called a ______.
Joint venture
Problems created by differences between countries' antitrust rules, labor laws, patents, copyrights, taxes, product liability, and child labor laws relate to which forces in the global business environment?
Legal and regulatory forces
In a general partnership, all partners share the responsibility for operating the business and assume -blank- for the business's debts.
Liability
What is the global strategy in which a firm allows a foreign company to produce its product in exchange for a fee?
License
Of all the strategies for reaching global markets, -blank- offers the least amount of commitment, control, risk, and profit potential.
Licensing
What entry strategy gives a firm the right to manufacture another firm's product or use its trademark for a royalty fee?
Licensing
When it comes to getting involved in international business what are the three strategies that require the least amount of commitment and effort?
Licensing, exporting, franchising
The most important things investors want to know are what makes the product more desirable than what's already available and whether or not the product can be patented. In which section of the business plan should investors look to find this information?
Marketing plan
What agreement created a free-trade area among the United States, Canada, and Mexico?
North American Free Trade Agreement (NAFTA)
Termination of a partnership is difficult without a(n) ______ agreement.
Partnership
The balance of -blank- is the difference between the flow of money into and out of a country
Payments
Distribution in many developing countries is difficult because of the lack of reliable transportation infrastructure due to natural disasters. This is an example of what type of forces affecting global trade?
Physical and environmental forces
Using information from the internet or other sources without giving credit to the author is:
Plagiarism
-blank- tariffs are designed to raise money for the government.
Revenue
A unique government creation that looks like a corporation but is taxed like a sole proprietorship or partnership is called a(n) -blank- corporation.
S corporation
Corporations can raise large amounts of money, take advantage of economies of scale, and hire experts in all areas of operation. This can be summarized as ______ advantage.
Size
Job seekers who want to work in global business should recognize that -blank- businesses account for about 1/3 of the U.S. exports.
Small
The SBA defines a -blank- business as one that is independently owned and operated, is not dominant in its field of operation, and meets certain standards of size in terms of employees or annual receipts.
Small
Export Assistance Centers provide hands-on exporting assistance and trade-finance support for -blank- and -blank- sized businesses
Small Medium
Who sets the standards of right and wrong as defined by ethics?
Society
The hurdles to success are higher and more complex in global markets than in domestic markets. Such hurdles include -blank- forces, economic and financial forces, (political) legal and regulatory forces, and physical and environmental forces.
Sociocultural
Shareholders are not liable for the debts of a corporation beyond the money they invest in it by buying company -blank-
Stock or shares
Which of the following are good ways to learn how to run your own business?
Talk to other business owners Work for a successful entrepreneur Run a small business during your off hours
The definition of ______ is a tax imposed on imports.
Tariff
What is true regarding the process of forming a corporation?
The articles of incorporation are usually filed in the state in which the company will be incorporated The bylaws of the corporation describe how the firm is to be operated
What is the definition of trade protectionism?
The use of government regulations to limit the import of goods and services
Which of the following characteristics are needed to become a successful entrepreneur?
Tolerant of uncertainty Action-oriented Initiative
Implementing ethical standards within an organization starts with ____.
Top management
Balance of -blank- is the total value of a nation's exports compared to its imports measured over a particular period.
Trade
When the value of a country's exports exceeds that of its imports, the country exhibits a(n) ______.
Trade surplus
True or false: The owner of a sole proprietorship is responsible for developing any fringe benefits they have.
True
Sole Propietorship Disadvantages
Unlimited liability Limited financial resources Management difficulties Overwhelming time commitment Few fringe benefits Limited growth Limited life span
What do strong managers help instill into the corporation when setting examples of ethical behavior?
Values
When two firms operating in different stages of related businesses join, it is called a(n) -blank- merger.
Vertical
Because of the difficulty in ending a partnership, decisions regarding which two areas should be spelled out in a partnership agreement?
When a partner can retire How to distribute assets
Which of following are true about the advantages and disadvantages of being a franchise owner:
While the upfront costs of a franchise may be steep, a franchise has a better chance of succeeding than starting a business from scratch Having a nationally recognized name for your business in a franchise can help with marketing and awareness
An independent entity whose purpose it is to oversee cross-border trade issues and global business practices is called the
World Trade Organization (WTO)
Partnership
a business organization owned by two or more persons who agree on a specific division of responsibilities and profits
sole propietorship
a business owned and managed by a single individual
Select the characteristics of an intrapreneur.
a creative person who works within a corporation someone who uses company's resources to launch new products he or she generates profits by leveraging a firm's human financial and physical resources.
What occurs in contract manufacturing?
a foreign company produces private-label goods to which a domestic company then attaches its own brand name or trademark
Corporation
a legal entity with authority to act and have liability apart from its owners
Because owners are only responsible for losses up to the amount they have invested in a corporation, limited liability is considered:
a major advantage
When the value of a country's imports is more than its exports, the country exhibits ______.
a trade deficit
The advantage that exists when a country has a monopoly on producing a specific product is called:
absolute advantage
David opened his own bicycle shop 30 years ago, and although he enjoyed his work, he needed more free time. When Josie requested to work as an apprentice, David was very willing. Before long Josie was able to run the store without any help. This is an example of how______.
apprenticeships can benefit both the business owner and the apprentice
An advantage of the separation of ownership from management in corporations is that the company can raise money from investors but the investors:
are not involved in daily operations
A corporation is formally formed with:
articles of incorporation and bylaws
The total value of a nation's exports compared to its imports measured over a particular period is the definition of ______.
balance of trade
Global trade is measured using two key indicators known as the:
balance of trade balance of payments
In 2019, online retail sales reached over $365 -blank-, or approximately -blank- percent of all retail sales.
billion 12
Effective ethics officers implement ethical standards in what two ways?
by maintaining confidentiality with employees by conducting objective investigations to ensure fairness
What two tasks are important to complete when writing a business plan?
calculate how much money you need to start analyze the competition
The guiding principle of free economic exchange is:
comparative advantage theory
Written ethics codes can be categorized as
compliance-based Integrity-based
Corporate social responsibility is based on a ______.
concern for the welfare of society
The attributes of a conventional corporation include that:
corporate liability is separate from owners it is state chartered it is a legal entity
What is a good tactic for entrepreneurs to implement in order to keep a new company growing?
delegate authority to employees
Students attending colleges and universities abroad often notice products that are unavailable in their home countries and
develop start up financing to become importers of that product while still students have to develop financing and work long hours to import the products to their home countries work with native producers to import the products to their home countries
A corporation is a legal -blank- with authority to act and have liability separate from its owners.
entity
The value of one nation's currency relative to currencies of other countries is referred to as ______.
exchange rate
A trade surplus occurs when a country's:
exports are greater than imports
Mark, Cal and Aidan have decided to form a business where all owners will share in operating the business and in assuming liability for the business debts. They are most likely forming a(n) -blank- partnership.
general
In the United States, many employees report that they are unethical at work because they:
goof off violate safety standards
The motives of those involved in unethical behavior that caused the financial crisis in the real estate, banking, and mortgage industries included:
greed the wish to inflate their own earnings
-blank- are creative people who work as entrepreneurs within corporations.
intrapreneurs
The United States has had a trade deficit since 1975 because ______.
it bought more goods from other nations than it has sold
There are more than 7 billion potential customers in 195 countries around the globe. Each country possesses unique materials and skills, and as technology advances, communication barriers are being brought down. Because of this,
it is important to conduct business globally
A sole proprietorship has a limited life span unless:
it is taken over by an heir it is sold to someone else
A business should be managed ethically because
it reduces employee turnover it reduces the likelihood of lawsuits by employees or customers businesses with good reputations attract customers
Unethical behavior by financial and real estate businesses has led to ______.
lack of trust in the free market system
Legal and regulatory forces can create problems in the global market because ______.
laws and regulations vary greatly between countries
The start-up costs of filing for incorporation are high because
lawyers and accountants are needed to do the complex filings
Stockholders' liability for losses only up to the amount they invest is called ______________.
limited liability
When trying to decide where to expand his operations, a small business owner studied several different nations. He analyzed each nation's balance of trade and balance of payments. This small business owner was:
measuring global trade
What are three threats to the future of global trade?
nuclear proliferation rogue states Terrorism
Community Development Financial Institutions (CDFI) have been successful because they:
offer counseling on marketing strategies maintained financial discipline other lenders lack provide counseling on improving cash flow
A small business is defined as:
one that is independently owned and operated one that is not dominant in its field one that meets certain standards of size in terms of employees or receipts
Select those items considered fringe benefits that people working for a company are likely to receive, but a sole proprietor has to develop on his own
paid sick or vacation leave time paid health insurance a pension plan
A foreign subsidiary is a company owned in a foreign country by another company called the ______.
parent company
All organizations require the following:
planning information management Capital
Although there are many functions that are important in both the start-up and management phases of the business, what two functions are considered to be primary concerns?
planning and financing
why do people become entrepreneurs.
profit independence Opportunity
When the retail price of imported products is increased for the purpose of making domestic goods more competitively priced it is called a(n)
protective tariff
The Small Business Administration (SBA) is the U.S. government agency that advises and assists small businesses by
providing loans providing management training providing financial advice
What four items are addressed in a business plan?
qualifications of owners the nature of the business any competitive advantages the business has the target market
Global trade with 7.7 billion potential customers is attractive, but the threats to trading globally include which of the following?
rogue states income inequality Terrorism
If the statement "ethics is caught more than it is taught" is true, then management facilitates this by:
setting a good example
Job seekers interested in working in global trade should consider applying to:
small businesses major companies
Studies have indicated that partnerships are four times more likely to succeed than:
sole proprietorships
Learning from others is a useful way to avoid pitfalls when starting a small business. Some things you may be told would include:
starting with enough money to hire a good lawyer and accountant that finding and retaining good workers is hard
For a business to grow, prosper, and create economic opportunity, many people have to be willing to invest money in it. An advantage of a corporation is its ability to raise money through the sale of -blank-
stock, bonds, shares, or equity
Benefits of exporting goods such as snowplows and sand to the Middle East include that
there is likely to be less competition the product may be used differently than in the U.S.
What are two characteristics of businesses that practice corporate social responsibility?
they care for the welfare of society as a whole they care about being fair and honest with their stakeholders
Some common causes of small business failure include:
underpricing or overpricing goods or services no experience in that business or industry starting with too little capital
After working for a large auto manufacturing company for over 20 years, Silvia decided to start her own auto accessory store. While facing new challenges every day, Silvia enjoys being free to manage her company as she desires. This example illustrates:
why people take the risks of entrepreneurship
Studies have found a strong correlation between academic dishonesty and dishonesty at -blank-
work