Gen Bus Midterm 1 Review

Which of the following marketing concepts emerged during the marketing era?

A consumer focus that permeates successful companies in every department, at every level.

b. does not make sufficient provision for the environment.

A pure market economy: a. provides sufficiently for the old and the sick. b. does not make sufficient provision for the environment. c. necessitates high taxes. d. does not allow people the freedom to be innovative.

Anya is an administrator at Zenorx Inc., a start-up software company. She is responsible for acquiring capital for the company. In the context of the various factors of production that businesses rely on, which of the following functions is most likely to be a part of Anya's responsibilities?

Acquiring synthetic resources like computers and telephones

Which of the following statements best describes e-commerce?

Business transactions conducted online, typically via the Internet

In the context of the history of American business, which of the following statements is true of the relationship era?

Businesses aim to build long-term relationships with customers because satisfied customers can become advocates for a business.

In the context of the history of American business, which of the following statements is true of the marketing era?

Businesses began to develop brands to help customers understand the differences among various products.

Which of the following scenarios illustrates the utilization of human resources as a factor of production?

Carlos hires a content writer to develop content for his online portal that sells fashion accessories.

Which of the following statements is true when a person makes a career choice based on what he or she loves doing?

Chances of personal success are boosted.

d. Natural monopoly

Cleftell Inc., a coal mining company in the United States, is the only supplier of coal in its area. The company is backed by the government as it offers its supplies at a discounted rate. Government backing makes it easier for the company to deal with legislation, thereby increasing its overall efficiency and productivity. Which of the following market structures is exemplified in the scenario? a. Oligopoly b. Monopsony c. Pure competition d. Natural monopoly

In the context of the history of American business, which of the following is a feature of the relationship era?

Cultivating current customers turn out to be more profitable than constantly seeking new ones.

In the context of the history of American business, which of the following statements is true of the industrial revolution?

Factories hired large numbers of semiskilled workers who specialized in a limited number of tasks.

_____ are four fundamental resources—natural resources, capital, human resources, and entrepreneurship—that both businesses and nonprofits rely on.

Factors of production

_____ is an international economic and political movement designed to help goods and services flow more conveniently across international boundaries.

Free trade

The _____ is an international trade agreement that has taken bold steps to lower tariffs and promote free trade worldwide.

General Agreement on Tariffs and Trade

Which of following was a result of the bold steps taken by the General Agreement on Tariffs and Trade (GATT) to reduce trade restrictions worldwide?

Goods moved more freely than ever across international boundaries.

Which of the following factors of production encompasses the physical, intellectual, and creative contributions of people working within an economy?

Human resources

a. It usually tends to be understated as it does not include any illegal activities.

Identify a true statement about real gross domestic product (GDP)? a. It usually tends to be understated as it does not include any illegal activities. b. It does not include an inflation adjustment. c. It tends to be overstated as it includes output produced within households. d. It does not include the domestic production of the producers that are foreign-owned.

a. banks must hold more funds

If the Federal Reserve increases the reserve requirement, _____. a. banks must hold more funds b. it is not likely to impact banks c. there will be more loans available d. interest rates on loans will dip

d. demand

In a free market system, _____ refers to the quantity of products that consumers are willing to buy at different market prices. a. supply b. trade c. embargo d. demand

c. A low level of productivity tends to correlate with a stagnant economy.

In the context of evaluating economic performance, which of the following statements is true of productivity? a. It is a measure of the willingness of consumers to buy products at different market prices. b. A company with no competitors in a market demonstrates low productivity. c. A low level of productivity tends to correlate with a stagnant economy. d. It is a measure of the number of identical products each competitor manufactures.

d. lower taxes can leave more money in people's pockets for them to spend or invest.

In the context of fiscal policy, most economists agree that: a. fiscal strategies are in no way influenced by political philosophies. b. preplanning the pension of individuals can have adverse effects on their job prospects. c. curbing inflation would result in shortage of manpower. d. lower taxes can leave more money in people's pockets for them to spend or invest.

a. can obtain funds at a lower cost.

In the context of monetary policy, when the Fed reduces the discount rate, banks: a. can obtain funds at a lower cost. b. owe more money to the Fed. c. can buy and sell government securities. d. must cut back on the loans they make.

d. They accept demand deposits and make loans for the public.

In the context of monetary policy, which of the following statements is true of commercial banks? a. They are not eligible to fund businesses. b. They regulate the supply and circulation of money in the country. c. They decide the taxable income slabs for their districts. d. They accept demand deposits and make loans for the public.

a. They involve securities that the government issues to finance its deficit spending.

In the context of monetary policy, which of the following statements is true of open market operations? a. They involve securities that the government issues to finance its deficit spending. b. They involve a market structure in which many competitors sell virtually identical products. c. They protect depositors who may want to withdraw their money without prior notice. d. They are based on private ownership, economic freedom, and fair competition.

b. They can harm the economy.

In the context of the different degrees of competition, which of the following is a reason why monopolies are considered illegal? a. They support dubious producers. b. They can harm the economy. c. They lead to copyright issues when identical products are sold by different sellers. d. They generate a strain on the supply of raw materials.

c. subprime mortgages

In the context of the global economic crisis, _____ are defined by experts as loans to borrowers with low credit scores, high debt-to-income ratios, or other signs of a reduced ability to repay the money they borrow. a. subsidized credits b. concessional debts c. subprime mortgages d. endowment loans

d. They were seen by the lenders as low-risk loans.

In the context of the global economic crisis, which of the following statements is true of subprime mortgage loans? a. They could not be obtained easily, and repayment was mandatory. b. They were given to borrowers with high credit scores. c. They were only given to debtors with high income-to-debt ratios. d. They were seen by the lenders as low-risk loans.

In the context of the technological environment, which of the following statements is true of business technology?

It includes any tools that companies can use to become more efficient and effective.

In a business, which of the following statements best describes profit?

It is the money that a business earns in sales, minus expenses.

Conela is a nonprofit organization that renovates abandoned government schools and facilitates their functioning. It is headed by two social activists and is funded by the government. Which of the following statements is true of Conela?

It takes in revenue like any other business.

Drenexa Pharmaceuticals is based in the United States. In the context of the social environment, which of the following is most likely to be an impact of the rapidly aging population on Drenexa Pharmaceuticals?

It will gain profits as the rapidly aging population will cause the companies that cater to the elderly to boom.

In the context of the history of American business, which of the following statements is true of the production era?

Jobs became specialized, increasing productivity and lowering costs and prices.

In the context of the history of American business, which of the following statements is true of the entrepreneurship era?

Large-scale entrepreneurs emerged in the second half of the 1800s, building business empires.

In the context of a business environment, which of the following is a key element of the U.S. economic environment?

Legislation that supports enforceable contracts

Which of the following is a similarity between millennials and digital natives?

Like millennials, digital natives tend to be extremely tolerant and inclusive.

In the context of factors of production that businesses and nonprofits rely on, which of the following can be classified as capital?

Machine

In the context of factors of production that businesses and nonprofits rely on, which of the following statements is true of natural resources?

Most of them must be extracted, purified, or harnessed.

_____ are business-like establishments that employ people and produce goods and services with the fundamental goal of contributing to the community rather than generating financial gain.

Nonprofits

Which of the following factors is most likely to be covered by the social environment dimension of a business?

Population size and density

b. producer price index

The _____ is a measure of inflation that evaluates the change over time in the weighted-average wholesale values. a. cost-weighted activity index b. producer price index c. knowledge economic index d. buyer cost rating index

a. unemployment rate

The _____ is the percentage of people in the labor force over age 16 who do not have jobs and are actively seeking work. a. unemployment rate b. recruitment rate c. turnover rate d. hyperinflation rate

Which of the following is a key dimension of the business environment?

The economic environment

In the context of the social environment of the United States, which of the following statements is true of diversity?

The growth in ethnic populations offers robust profit potential for firms pursuing them.

c. socialist economic system

The nation of Platinia provides its citizens with free healthcare and education services. The government of Platinia funds these programs through high taxation. In addition to these services, the government also runs utilities, telecommunications, and several other enterprises. The nation of Platinia exemplifies a _____. a. capitalist economic system b. mixed economic system c. socialist economic system d. communist economic system

b. privatization

The nation of Radonia recently approved the sale of its national railway service to a company called Dontsky Rail Corporation. The company has no association with the country's government and operates on its own terms. The sale of Radonia's national railway service to Dontsky Rail Corporation is an example of _____. a. globalization b. privatization c. a joint venture d. a coalition

b. business cycle

The periodic contraction and expansion that occur over time in virtually every economy is known as the _____. a. business spiral b. business cycle c. business framework d. business pattern

b. hyperinflation

The prices of all the commodities have gone up in the country of Sraznesia, and this has led to country-wide protests. The situation worsens as the average prices increase more than 50% a month, resulting in more aggressive protests from the citizens. In the given scenario, this price rise will most likely lead to _____. a. privatization b. hyperinflation c. a depression d. a credit crunch

In the context of the U.S. economic environment, which of the following is a government policy that supports business?

The relatively low federal tax rate

b. capitalism.

The right to fair competition is one of the fundamental rights of: a. monarchism. b. capitalism. c. totalitarianism. d. communism.

In the context of factors of production, which of the following statements is true of entrepreneurial enterprises?

They can kick-start an economy, creating a tidal wave of opportunity by harnessing other factors of production.

In the context of the competitive environment, which of the following statements is true of bleeding-edge firms?

They launch products that fail because they are too far ahead of the market.

Which of the following statements is true of entrepreneurs?

They produce a ripple effect that enriches everyone around them.

Which of the following statements is true of millennials?

They shaped the Internet.

b. TARP was a $700 billion economic bailout plan, whereas the American Recovery and Reinvestment Act was an $825 billion economic stimulus package.

Which of the following is a difference between the Troubled Assets Relief Program (TARP) and the American Recovery and Reinvestment Act? a. TARP was implemented exclusively to assist in building infrastructure, whereas the American Recovery and Reinvestment Act was passed to bail out financial institutions. b. TARP was a $700 billion economic bailout plan, whereas the American Recovery and Reinvestment Act was an $825 billion economic stimulus package. c. TARP included a $150 billion investment in green energy, whereas the American Recovery and Reinvestment Act made no investments in green energy. d. The money released through TARP was not repaid at all, whereas the money released through the American Recovery and Reinvestment Act was partially repaid by insurance companies.

a. It is the shortfall that occurs when expenses are higher than revenue over a given period of time.

Which of the following statements best describes a budget deficit? a. It is the shortfall that occurs when expenses are higher than revenue over a given period of time. b. It is the difference between the budgets allocated in two consecutive financial years. c. It is the sum of all the money borrowed by the government over the years and not yet repaid. d. It is the shortfall that occurs when the total value of a nation's annual imports is higher than the total value of its annual exports.

c. The vast majority of enterprises are privately owned by businesses.

Which of the following statements is true of capitalism? a. It refers to publicly owned institutions that are solely funded by the government. b. The state makes all decisions related to production and pricing. c. The vast majority of enterprises are privately owned by businesses.

c. It was a package of draconian across-the-board spending cuts.

Which of the following statements is true of the fiscal cliff? a. It was created when a deal was reached to temporarily allow a shutdown crisis. b. It was expected to cause a rapid increase in the U.S. budget deficit. c. It was a package of draconian across-the-board spending cuts. d. It referred to the profits earned by companies because of a dip in the tax rates.

b. Companies began to announce layoffs.

Which of the following was a result of the collapse of financial institutions during the economic crisis in the United States? a. Banks lent money only to other banks. b. Companies began to announce layoffs. c. Funds were available only to fund day-to-day operations. d. Unemployment rates declined at a rapid rate.

In the context of factors of production, which of the following is a natural resource?

Wind

a. Communism

_____ is an economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government. a. Communism b. Socialism c. Capitalism d. Mercantilism

_____ is an economic system based on private ownership, economic freedom, and fair competition. a. Capitalism b. Socialism c. Communism d. Totalitarianism

a. Capitalism

Which of the following statements is true about the debt ceiling? a. Debt ceiling hikes are fairly routine. b. Voting on the debt ceiling happens together with voting on taxes and spending. c. Debt ceiling hikes are strictly decided by public policy polling. d. Debt ceiling hikes usually do not depend on the amount already owed by the federal government.

a. Debt ceiling hikes are fairly routine.

In the context of various strategies for reaching global markets, which of the following strategies represents the deepest level of global involvement? a. Direct investment b. Exporting c. Franchising d. Foreign licensing

a. Direct investment

_____ is the total value of all final goods and services produced within a nation's physical boundaries over a given period of time. a. Gross domestic product b. A budget surplus c. The producer price index d. Operating cost

a. Gross domestic product

Which of the following statements is true of structural unemployment? a. It encompasses people who don't have jobs because the economy no longer needs their skills. b. It occurs when workers refuse to be retrained to migrate to other jobs in an organization. c. It is a brief span of unemployment that occurs before the business owners hire the workers back into the company. d. It is short term, tends to be ultimately positive, and reflects the freedom to change jobs.

a. It encompasses people who don't have jobs because the economy no longer needs their skills.

Which of the following statements best describes a budget surplus? a. It is the overage that occurs when revenue is higher than expenses over a given period of time. b. It is the losses that occur when the total value of a nation's imports is higher than the total value of its exports. c. It is the amount borrowed by a company without any guarantee. d. It is the total amount owed by high-income people in a country who are yet to repay their loans.

a. It is the overage that occurs when revenue is higher than expenses over a given period of time.

Which of the following was a reason for the collapse of financial institutions during the economic crisis in the United States? a. There was a drop in mortgage values. b. Borrowers refinanced their loans to lower their payments c. There was a hike in the debt ceiling. d. Housing prices went up too quickly.

a. There was a drop in mortgage values.

In the context of the global economic crisis in mid-2000, identify a true statement about subprime loans. a. They were given to borrowers with little or no documentation. b. They were preferably given to borrowers with low debt-to-income ratios. c. They required a high down payment. d. They were seen by the lenders as high-risk loans.

a. They were given to borrowers with little or no documentation

In the country of Harashimin, the government strongly backs the labor class of the country. It is authoritarian in nature and believes in exploiting wealthy citizens to fulfill its agenda of bringing social and financial equality in the society. In this scenario, the government of Harashimin has most likely adopted the political philosophy called _____. a. communism b. totalitarianism c. socialism d. capitalism

a. communism

In the context of evaluating economic performance, productivity is calculated by: a. dividing the amount of output by the amount of input. b. adding the amount of output to the amount of input. c. subtracting the amount of input from the amount of output. d. multiplying the amount of input with the amount of output.

a. dividing the amount of output by the amount of input.

In the context of the production era, the "hard sell" refers to the:

aggressive persuasion designed to separate consumers from their cash.

_____ is the rate of interest that the Federal Reserve charges when it loans funds to banks. a. Budget interest b. The discount rate c. Fiscal interest d. The debt rate

b. The discount rate

In the context of the various strategies for reaching global markets, which of the following statements is true of imported products? a. They refer to the creation of duplicates of huge profit-making products. b. They don't carry the brand name of the company buying them. c. They are grown domestically when new facilities are developed in foreign countries. d. They need foreign licensing and foreign franchising.

b. They don't carry the brand name of the company buying them.

In the context of planned economies, _____ tend to have high taxes, which are designed to distribute wealth more evenly through the public. a. capitalist economies b. socialist economies c. monarchist economies d. communist economies

b. socialist economies

In the context of measuring economic performance, which of the following statements is true of gross domestic product (GDP)? a. It measures the total value of imports as compared to the exports of a nation. b. It reduces when the products produced involve high levels of pollution. c. It ignores legal goods that are not reported to avoid taxation. d. It accurately predicts when economic changes will occur or how long they will last.

c. It ignores legal goods that are not reported to avoid taxation.

In the context of the free market system, which of the following statements best describes pure competition? a. It is a market structure where single producers can control the price that customers would need to pay for a product. b. It is a market structure where new producers are not allowed to enter the competitive market. c. It is a market structure with many competitors selling virtually identical products. d. It is a market structure with one business completely dominating the industry.

c. It is a market structure with many competitors selling virtually identical products.

Which of the following was an impact of the American Recovery and Reinvestment Act? a. Taxes were hiked. b. Economy took a downward turn as the funds deployed were insufficient. c. People traded good-paying jobs for lower-paying positions. d. Employment rates fell dramatically.

c. People traded good-paying jobs for lower-paying positions.

In the context of the business cycle, _____ is an economic downturn marked by a decrease in the gross domestic product (GDP) for two consecutive quarters. a. a credit crunch b. stagnation c. a recession d. inflation

c. a recession

The term _____ refers to government efforts to influence the economy through taxation and spending decisions that are designed to encourage growth, boost employment, and curb inflation. a. reservation requirement b. open market operation c. fiscal policy d. monetary policy

c. fiscal policy

In the context of international trade restrictions, offering less-favorable exchange rates to certain importers is a(n) _____. a. export restraint b. trading bloc c. nontariff barrier d. embargo

c. nontariff barrier

In the context of factors of production that businesses and nonprofits rely on, _____ cannot be considered a natural resource.

cereal crops

Which of the following statements is true of the debt relief program implemeted by the International Monetary Fund (IMF)? a. It helped some poor countries with huge debts by instructing the other member nations to invest in them. b. It provided monetary help at zero percent interest to poor countries. c. It stretched the clearance deadline for all debts held by poor countries without applying additional interest rates. d. It extended 100 percent debt forgiveness to some poor countries.

d. It extended 100 percent debt forgiveness to some poor countries

In the context of monetary policy, which of the following statements is true of the reserve requirement? a. It allows banks to hold lesser funds if the Fed changes its bulk amount collection schemes. b. It refers to the requirement of having a predetermined amount of contingency money. c. It involves buying and selling of treasury bonds, notes, and bills. d. It helps protect depositors who may want to withdraw their money without notice.

d. It helps protect depositors who may want to withdraw their money without notice.

Which of the following statements is true of the economy? a. Its rise or downfall has no effect on the common man. b. It is inclined toward politics and rarely affects businesses. c. It solely indicates how resources are maintained in government-owned institutions. d. It is essentially a financial and social system.

d. It is essentially a financial and social system.

Which of the following statements best describes the consumer price index (CPI)? a. It measures the change over time in the prices that businesses pay each other for goods and services. b. It refers to a standard equation that is used to determine the amount of resources needed to produce certain goods depending on consumers' needs. c. It refers to the quantity of products that consumers are willing to buy at different market prices. d. It measures the change in weighted-average price over time in a consumer market basket of goods and services that the average person buys each month.

d. It measures the change in weighted-average price over time in a consumer market basket of goods and services that the average person buys each month.

_____ involve buying and selling government securities, which include treasury bonds, notes, and bills. a. Reserve requirement allowances b. Social funding processes c. Free banking services d. Open market operations

d. Open market operations

Perggy's Bakes, a bakery in New Orleans that exclusively sells its confectionery products online, makes its products only when it receives an order. The bakery produces the products as per the order and delivers to the customer's homes. It does not produce any excess products. In the given scenario, the price associated with the demand and supply of the products at Perggy's Bakes reflects the _____. a. skimmed price b. parity price c. grounded price d. equilibrium price

d. equilibrium price

The term _____ refers to the sum of all the money that the federal government has borrowed over the years and not yet repaid. a. federal surfeit b. budget slippage c. budget surplus d. federal debt

d. federal debt

The Krakozhian fashion market has many brands that sell clothing. However, each brand sells clothing designed for different niches in the market. In this scenario, the market structure prevalent in the Krakozhian fashion market is _____. a. pure competition b. oligopoly c. monopoly d. monopolistic competition

d. monopolistic competition

In the context of mixed economies, pure planned economies are practically nonexistent in today's world because they would: a. not provide sufficiently for the old and the sick. b. curtail people's individual freedom to choose a source of livelihood. c. not enable the government to exercise control over the market. d. not create enough value to support their people over the long term

d. not create enough value to support their people over the long term

During the _____, the government of the United States stepped into the business realm to pass laws to regulate business and protect consumers and workers.

entrepreneurship era

Jason set up a textile mill in his hometown in 1865. He became a rich businessman by the time his son Earl took over the business in 1895. Soon after Earl started heading the business, the government passed laws to regulate business and protect consumers and workers. Due to this move by the government, the textile mill had to introduce a fixed salary structure for its employees and implement quality checks for the products manufactured. In the context of the history of American business, Jason had set up this textile mill in the _____.

entrepreneurship era

When making a career choice, experts often advise graduating students to:

find a career they love as it will tend to be more rewarding.

In the context of the global environment, the _____ has lowered prices and increased quality across virtually every product category, as competition becomes truly global.

free-trade movement

During the __________, as mass production took hold, huge factories replaced skilled artisan workshops.

industrial revolution

During the production era, in the early part of the 1900s, major businesses focused on:

refining the production process and creating greater efficiencies.

In the context of the competitive environment of a business, the best measure of value is the:

size gap between product benefits and price

The quality and quantity of goods and services available to a population is referred to as the _____.

standard of living

Businesses that strongly focus on customer satisfaction tend to:

transform their current customers into loyal advocates for themselves.