Intro to Buissness Exam 1
In the context of social responsibility, _____ are a new corporate structure that value profits, but not more than other priorities such as employees, suppliers, the community, and the environment.
B corps
In the context of social responsibility, _____ are a new corporate structure that value profits, but not more than other priorities such as employees, suppliers, the community, and the environment.
B-corps
When people use the term "corporation" without specifying which type, they are generally referring to a(n) _____.
C corporation
In the context of the social environment of business, which of the following statements is true of workers?
Firms encourage a great level of mutual respect between employees and employers through open communication.
In the context of the history of American business, which of the following occurred during the entrepreneurship era?
Industrial titans created enormous wealth that raised the overall standard of living across the country.
Which of the following statements is true of profit in a business?
It is the financial reward that comes from starting and running a business.
The Canadian government issues a legal notice to one of its coal manufacturing companies after the government learns that the heating equipment purchased by the company emits a higher level of gases than the level permitted by the Environmental Protection Agency. In this scenario, the coal manufacturing company is in violation of exceeding the level of its _____ emissions.
Scope 2
The residents of North Barkminster, a suburb in the European country of Geratow, protest against a large corporation that is newly established in the area. They complain that there has been a rise in respiratory illnesses among the people because of the pollution caused by employee commute following the company's establishment. In this scenario, the residents of North Barkminster are protesting against the company's _____ emissions.
Scope 3
The Small Business Administration (SBA) supports the _____, which provides free, comprehensive counseling for small businesses from qualified volunteers.
Service Corps of Retired Executives
Lint Port, an apparel company, offers personalized customer service in all its stores and engages in post-purchase communication to take feedback from its customers. It also gives gift vouchers with customized messages to its customers on their birthdays. The company values the importance of building long-term customer relationships. In this context, which dimension of the business environment is affected the most?
The competitive environment
Which of the following statements is true of necessity entrepreneurship in high-income countries?
The rate of necessity entrepreneurship is low.
n the context of the history of American business, which of the following statements is true of the industrial revolution?
There was a loss of individual ownership in the production process.
In the context of today's business environment, which of the following statements is true of millennials?
They can be trained and developed to fill the leadership gap that is being created by the retirement of baby boomers.
Which of the following is a difference between the supply curve and the demand curve?
Unlike the supply curve, the demand curve for most goods and services slopes downward as it moves to the right.
When companies promoting corporate social responsibility measure their success by evaluating a double bottom line, they:
account for social-responsibility indicators, such as community involvement.
In the context of social responsibility, _____ are a new corporate structure that value profits, but not more than other priorities such as employees, suppliers, the community, and the environment.
b- corps
When the Fed sells securities, _____.
banks cut back on the loans
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.
The West Asian country of Quinland is experiencing an economic downturn. There has been a decrease in its gross domestic product for two consecutive quarters. In this scenario, Quinland is most likely facing an _____.
economic recession
Based on statistics from the U.S. Small Business Administration, small businesses comprise 49.9% of all businesses in the United States.
false
Capitalism is an example of a planned economy.
false
In the context of federal debt, if spending is lower than revenue, the government incurs a budget deficit.
false
Signing a franchise agreement exempts the franchisee from making any form of payments to use a franchisor's products.
false
People with an external locus of control:
feel buffeted by forces such as random luck.
When Congress agreed to raise the debt ceiling during the economic meltdown in the United States in 2011, it temporarily averted a shutdown crisis, but the deal they reached to do so created the _____.
fiscal cliff
Verti, a North American country, engages in business with Jerg, a South American country. Verti imports agricultural products from Jerg, whereas Jerg outsources its technological operations to workers in Verti. The two nations are able to carry out these business transactions with minimal tax implications. The given scenario most likely exemplifies the concept of _____.
free trade
Amanda has always been inclined toward baking and wants to open her own bakery. She takes a loan of $20,000 from the bank and starts a bakery in her hometown. In the context of the four forms of business, Amanda most likely _____.
has a sole proprietorship
A typical partnership agreement includes details about:
how partners will settle dissagreements
Irkholm, a South American nation, experiences an economic downturn that leads to an increase in average prices across the country. The situation becomes more serious when average prices increase more than 50% per month. In the given scenario, Irkholm is experiencing _____.
hyperinflation
Vandium, a high-end smartphone, is known for its excellent audio quality and processing speed. However, most of its users complain of certain technical issues after a period of five months. The company, however, is well aware of these issues because it deliberately designs these products to fail after a certain period—a strategy to generate revenue through service charges. In the context of business behavior, Vandium's business conduct is:
legal but unethical
In the United States, people come from such diverse backgrounds that establishing broad agreement on specific ethical standards can be daunting. In this situation, a given country's _____ provides a solid starting point for examining ethical standards.
legal system
_____ are market structures with one company as the supplier of a product because the nature of that product makes a single supplier more efficient than multiple, competing ones.
natural monopolies
Twilight Glitters sells ornate diamond jewelry. The company obtains diamond ore from the Yakutia region of Russia. In this scenario, the ore obtained by Twilight Glitters can be classified as _____.
natural resources
In the context of small business opportunities, because of their size, many small firms can:
offer personal customer service.
In the context of codes of ethics, the Johnson & Johnson Credo refrains from:
overpromising financial rewards
A corporation is a separate entity from its owners where the:
owners are not personally responsible for the obligations of the company.
Which of the following factors is most likely to be covered by the social environment of business?
population size
In the context of the history of American business, during the _____, jobs became more specialized, increasing productivity and lowering costs and prices.
production era
Universal ethical standards can solve the problem of too many people viewing ethics as _____.
realitive
In the _____, leading-edge firms look beyond each immediate transaction with a customer and aim to build long-term ties.
relationship era
Walid, an IT professional, is known for his perseverance, his self-discipline, and taking accountability for his actions. In the context of universal ethical standards, Walid most likely possesses the core value of _____.
responsibility
Which of the following is an advantage associated with a sole proprietorship?
retention of control
In the context of the competitive environment of business, which of the following can be a key source of competitive advantage?
speed to market
According to the U.S. Small Business Administration (SBA), to officially count as "small," _____.
the average revenue of a business should range from $0.75 million to $28.5 million
Angela runs a fashion boutique for women. Her customers can use an online editing software to create a rough image of the design and style they want Angela to use. The opportunity of _____ is highlighted in the given scenario.
using technology
_____ is a form of unemployment that involves layoffs during recessions.
Cyclical
Which of the following statements is true of successful firms?
They deliver unsurpassed value to their customers.
A _____ is a type of franchising arrangement in which the franchisor makes a product and licenses the franchisee to sell it.
distributorship
The significance of the social dimension of a business environment is highlighted when a number of states—from Alabama to Nevada—make their local economies more appealing by providing special tax deals to attract new firms.
false
A(n) _____ can operate under simpler arrangements than conventional corporations
statutory close corporation
Buying an established business is a better plan than starting your business from scratch because:
the organizational structure is in place
A drawback of communism, which was adopted by some countries in the 1900s, was the inability of people to make basic choices such as where to work or what to buy.
true
An advantage of starting a business from scratch is that the entrepreneur has the freedom to use his or her own ideas and concepts.
true
Capital, one of the factors of production, includes machines, tools, buildings, information, and technology.
true
Gross Domestic Product (GDP) levels tend to be somewhat understated, since they don't include any illegal activities, which can represent a significant portion of some countries' production.
true
In the context of creating and maintaining an ethical organization, more-engaged employees are much less likely to behave badly.
true
In the context of the diversity in the American population, Caucasians continue to represent the largest chunk of the population at 63%.
true
In the context of your career choice, the broader economy will influence the level of your personal financial success.
true
In the context of fiscal policy, which of the following actions by the government helps boost the economy in the long term?
Investing in public assets, such as a national renewable energy grid
Reserve requirement is a rule of the Fed which requires that all of its member banks hold funds which are more than the stated percentage of the deposits held by their customers.
false
Brian had started a new business venture using majority of his savings. However, his divorce affected him monetarily because of which he had to shut down his business. Which of the following threats is highlighted in the given scenario?
high risk of failure
Carla and Liang both have shares in HD&Z Corporation, a C corporation that offers limited liability to all its owners. In this context, Carla and Liang are the _____ of HD&Z Corporation.
stockholders
Which of the following dimensions of a business environment embodies the values, attitudes, customs, and beliefs shared by groups of people?
the social enviroment
The government in the town of Rodenham has granted exclusive rights to a few telecommunications companies to operate in specific geographic areas. The companies have to provide their services in the areas allotted to them, and no company is allowed to extend its services to the areas allotted to its competitors. This system has been put in place because it would be inconvenient for each company to build its own infrastructure in all areas. The given scenario exemplifies:
a natural monopoly.
One of the ways by which companies can show their responsibility toward the environment is by reducing their _____.
carbon footprint
Conall is appointed by a nine-member board of directors of a real estate company to manage the company on a daily basis. The board ensures that Conall acts in a manner that is consistent with the interests of the stockholders. Given this information, Conall is most likely a _____.
chief executive officer
The most socially responsible companies establish _____ for their vendors, setting clear policies for human rights, wages, safety, and environmental impact.
codes of conduct
A(n) _____ is a combination of two firms that are in unrelated industries.
conglomerate merger
A Japanese company encourages its employees to participate in charitable activities. The company gives annual paid leave of ten days to its employees to volunteer at nonprofits or take part in activities that support environmental causes. Given this information, the company's initiative is an example of _____.
corporate philanthropy
Homebound, a home decor company, annually donates blankets to various nonprofit organizations. These nonprofit organizations distribute the blankets among the poor. Given this information, Homebound's gesture is an example of:
corporate philanthropy.
Socialism is an economic system that encourages privatization and believes that all enterprises should be publicly owned.
false
Mauve starts a business that specializes in procuring and selling antique items. Her business caters specifically to individuals who have high-income jobs and who like collecting unique artifacts. Mauve does not have much competition and can decide the prices of her products without any external influence. The opportunity of _____ is highlighted in the given scenario.
exploiting market niches
Fritzman Inc., a market research company, stocks its office pantry with an array of organic drinks and snacks to promote healthy eating habits among its employees. It also provides all its employees a free membership to a local gym. These gestures are Fritzman Inc.'s idea of _____.
social responsibility
Value is the relationship between the price of a good or a service and the benefits that it offers its customers.
true
In the context of the business cycle, which of the following statements is true of the period of economic contraction?
Consumers shift their buying patterns to more basic products.
Deborah dreams of owning a pub in the heart of the city that she lives in. Deborah has the music, ideas, and menu in place, and the funds required to start the pub. Which of the following suggestions is most likely to help Deborah realize her dream?
Deborah should start from scratch.
In the context of the social environment dimension of business, _____ is the measurable characteristics of a population.
Demographics
Which of the following is a negative factor that interferes with the effectiveness of socialist economic systems?
Inefficiencies and corruption
In the context of the fundamental rights of capitalism, which of the following statements is true about capitalism?
It doesn't guarantee that anyone will actually earn profits.
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.
Samuel has an innovative idea for better disposal of garbage. Hence, he starts a business to implement this idea that he believes will succeed. He is also aware of the risks involved in starting the business. However, Samuel puts in only six hours a day into building his business. Some days, he finds it difficult to put in any time at all. Which of the following entrepreneurial characteristics does Samuel lack?
energy
In the context of creating and maintaining an ethical organization, Robert Lane, former CEO of Deere, a highly performing, highly ethical corporation, declares that to establish an ethical culture, _____.
ethical words must be backed up with documented practices, processes, and procedures, all understood around the globe
Tobin starts a catering company of his own and earns a substantial profit in the first year itself. His total earnings are more than what he used to earn as a salaried person. Which of the following advantages of entrepreneurship is highlighted in the given scenario?
greater financial success
Troboli is a North American country. The total value of all final goods and services produced in Troboli in the last fiscal year was 3.3% more than the year before that. This growth placed Troboli in a better position than most of its allies. In this scenario, the total value of all final goods and services through which the economic condition of Troboli was assessed is known as _____.
gross domestic product
Clara and Sandra collaborate to open a cafe. They come to an arrangement wherein Sandra manages the cafe from Monday to Wednesday, Clara manages it from Thursday to Saturday, and both jointly manage it on Sunday. Both Clara and Sandra share the profits of the business equally while facing a personal liability for any debts or losses that the cafe may incur. In this scenario, Clara and Sandra most likely _____.
have a general partnership
Robert started his company in his parents' garage because he could not afford to rent an office space. Most of his finances were spent on procuring the essential items to set up his company. As a result, he was able to save funds for the future. The opportunity of _____ is highlighted in the given scenario.
having lower overhead costs
A(n) _____ is a form of business ownership that offers both restricted responsibility to its owners and flexible tax treatment.
limited liability company
Tornio, a steel company, imports iron ore from Marquette iron range in Michigan. In this scenario, the iron ore obtained by Tornio can be classified as _____.
natural resources
Spacein, a hard drive manufacturer, is accused of deliberately creating flaws in its product design. News reports hint that the company has been doing this for years to reduce the time between consumer repurchases. In the context of social responsibility, Spacein has been accused of _____.
planned obsolescence
The government of Lenzerbia, a country in South Asia, monitors its inflation rate using an index that measures change over time in the prices that businesses pay to each other for goods and services. In this scenario, the Lenzerbian government most likely uses the _____ to evaluate inflation.
producer price index
A(n) _____, a type of divestiture, occurs when a company issues stock in one of its own divisions or operating units and sets it up as a separate company—complete with its own board of directors and corporate officers.
spin-off
CappaStreet is a company that produces gourmet coffee. The company's employees, the coffee bean growers who supply raw materials to the company, the people who purchase its coffee, and the people who live in the community where the company has its production unit are CappaStreet's:
stakeholders
Inkglot Technologies, a medium-sized corporation, is allowed to have only 35 stockholders at any point of time. However, all stockholders of the company can actively participate in the management of the company while still maintaining limited liability. Given this information, Inkglot Technologies is most likely a(n):
statutory close corporation
Restazure, a beauty therapy center, focuses on customer satisfaction and building long-term relationships with customers. The firm ensures that customers are provided with high-quality services, and feedback is collected after every customer visit. It also provides its members with seasonal discounts and points every time they avail any of the center's services. In this context, which dimension of the business environment is affected the most?
the competitive enviroment
The Internal Revenue Service classifies each limited liability company (LLC) based on the tax treatment the company selects.
true
Mavin is the regional manager of Crustie Mex, a packaged food company. He is respected by his peers and subordinates for his immense knowledge and skills. Mavin decides to quit the company for a higher position at another firm. The CEO of Crustie Mex entices him with a competitive compensation package and promotion because he knows that Mavin is an important resource. The given scenario most likely exemplifies the concept of _____.
workforce advantage