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According to Frederick Herzberg’s two-factor theory, which of the following factors acts as a motivator? A) favorable working conditions B) favorable company policies C) increase in pay D) job security E) responsibility Answer: E Explanation: A) In Herzberg’s two-factor theory, […]

Outsourcing reduces opportunities for small businesses and entrepreneurs. Task identity refers to the employee’s perception of how his or her job impacts the lives of other employees. Answer: FALSE Explanation: Task identity refers to the degree to which the employee […]

An in-person or online gathering of media representatives at which companies announce new information is called a ________. A) press conference B) press release C) conversation marketing D) sale promotion E) trade promotion Answer: A Explanation: A) Press conference refers […]

A product is called a good if ________. A) its price is below the market standards B) it is predominantly tangible C) it has been standardized D) it is sold directly to the end consumers E) its price is above […]

Preparing a public offering involves ________. A) issuing corporate bonds to the employees of the firm B) hiring a public accounting firm to serve as auditor C) hiring a private company as a proxy firm D) raising $1 million as […]

The purchasing behavior of organizations is easier to understand than the purchasing behavior of consumers because it’s more clearly driven by economics and influenced less by subconscious and emotional factors. A joint venture does not result in a separate legal […]

The situation in which one supplier thoroughly dominates a market and essentially shuts out other competitors is called monopoly. The degree to which information flows freely within an organization is termed as insider trading. Answer: FALSE EXPLANATION: Insider trading refers […]

The manufacturing approach in which part of the product is mass-produced and the remaining features are customized is known as ________. A) batch-of-one production B) mass production C) customized production D) mass manufacturing E) mass customization Answer: E Explanation: A) […]

Theocratic law is law based on religious principles. Unlike retailers, wholesalers primarily sell products to consumers for personal use. Answer: FALSE Explanation: Unlike wholesalers, retailers primarily sell products to consumers for personal use. A lease is an agreement to use […]

A corporation is a legal entity distinct from the persons running the corporation. Government agencies require publicly traded companies to publish extensive and detailed financial reports. Answer: TRUE Explanation: To help investors make informed decisions about stocks, government agencies require […]

Which of the following is TRUE about the Americans with Disabilities Act (AD A)? A) It allows employers to ask job applicants to pass a physical examination as a condition of employment. B) It protects only those individuals who have […]

Dumping ________. A) involves selling a product at a price lower than the cost of production B) is a strategy used by firms to enter an industrialized nation C) refers to the practice of selling products in small quantities D) […]

________ stocks tend to fare better when the economy is doing worse and vice versa. A) Blue chip B) Income C) Penny D) Cyclical E) Defensive Answer: E Explanation: A) Defensive stocks are stocks of companies that tend to fare […]

Retail stores that exist for only a short time and are designed more as attention-getting events than as ongoing retail operations are called ________. A) pop-up stores B) retail theaters C) hybrid stores D) off-price stores E) specialty stores ________ […]

________ is an accounting method in which revenue is recorded when a sale is made, and expense is recorded when it is incurred. A) Accrual basis B) Cash basis C) Profit basis D) Depreciation E) Deferral basis Line stretching refers […]

The federal funds rate is also known as the overnight rate. Reminder advertising tells past customers that a product is still available or a company is ready to serve their needs. Answer: TRUE Explanation: Reminder advertising tells past customers that […]

The board of directors are ________. A) the highest-ranked managers of a corporation B) elected by corporate officers C) representatives of the shareholders D) the top executives running a corporation E) elected by the employees of an organization Answer: C […]

One of the biggest disadvantages to advertising in newspapers is declining readership in many cities. ISO 9000 is a methodology used for customized production and avoids the use of standards. Answer: FALSE Explanation: ISO 9000 is a globally recognized family […]

Suppose that a manager completely hands over operational decision making to her subordinates. This manager is a democratic leader. Working capital refers to the amount of cash an organization has in hand. Answer: FALSE Explanation: Working capital refers to current […]

In a ________ organization, a manager usually has a wide span of control. A) tall B) line C) flat D) line-and-staff E) formal Answer: C Explanation: A) When a large number of people report directly to one person, that person […]

Over the past century, the union movement has attracted the greatest numbers of new members during times of prosperity. The organizational market consists of individuals and families who buy goods and services for personal or household use. Answer: FALSE Explanation: […]

A bank is building a new branch in a small suburb, and one of the decisions it must make is how many teller windows it needs to serve its customers effectively and cost efficiently on an average day. This is […]

Balanced funds refer to funds that invest in a combination of stocks and bonds. A business mindset is a view of business that considers the various decisions a business has to make as well as the challenges that it must […]

Factoring refers to lending a lump sum of cash via a promissory note or on-demand access without accepting any other securities. If the Fed sells Treasuries in open-market operations, the country’s money supply increases. Answer: FALSE Explanation: If the Fed […]

________ involves ads with graphical content served up on web pages based on some knowledge of an individual’s interests or behaviors. A) Targeted display advertising B) Infomercials C) Institutional advertising D) Guerrilla advertising E) Product placement Answer: A Explanation: A) […]

The legal systems in the United States and the United Kingdom are based on civil law. Creating variations of an existing product is referred to as line stretching. Answer: FALSE Explanation: Line stretching refers to adding items with price points […]

For goals to function as a motivator, the employee must believe in his or her ability to meet that goal. Capital is the collective intelligence of an organization. Answer: FALSE EXPLANATION: Capital includes money, computers, machines, tools, and buildings that […]

Companies attempt to increase the market valuation of a share by ________. A) repurchasing some of the shares through a stock buyback B) maintaining a lower than average price/earnings ratio C) announcing a stock split of its shares D) dividing […]

________ is an over-the-counter marketplace for short-term debt instruments such as Treasury bills and commercial papers. A) Options market B) Bond market C) Money market D) Stock market E) Futures market Answer: C Explanation: A) The money market is an […]

A growing number of customers are pursuing strategic sourcing, in which they forge closer relationships with a smaller number of strategic distribution partners. According to a recent survey of the companies that make up the S&P 500 stock market index, […]

All businesses have the capacity to cause harm to employees, customers, other companies, their communities, and investors. With a push strategy, the producer appeals directly to end customers. Answer: FALSE Explanation: With a pull strategy, the producer appeals directly to […]

Job enrichment expands a job horizontally. High-level managers rely heavily on subordinates to collect, analyze, and summarize information. Answer: TRUE Explanation: High-level managers rely heavily on subordinates to collect, analyze, and summarize information. Economics is the study of how a […]

________ refers to the rate at which the company is using up the funds from its initial investors. A) Capital ratio B) Order rate C) Hedge rate D) Burn rate E) Current ratio An operations manager is most likely to […]

Sam’s Club sells sports apparel to individual consumers for their personal use and to small businesses that resell those goods to consumers. Therefore, Sam’s Club functions as both a retailer and a wholesaler. The term outplacement services refers to external […]

________ refers to measuring quality against established standards after the good or service has been produced and weeding out any defective products. A) Statistical process control B) Quality assurance C) Quality control D) Continuous quality E) Total quality management The […]

Product mix is a complete list of all products that a company offers for sale. Consumers make all kinds of decisions that are hard to explain by any rational means. Answer: TRUE Explanation: Consumers make all kinds of decisions that […]

Organization structure is a framework that enables managers to divide responsibilities, ensure employee accountability, and distribute decision-making authority. The ethnic composition of the United States has been on a long-term trend of decreasing diversity. Answer: FALSE Explanation: United States has […]

Savings and loan associations are not-for-profit, member-owned cooperatives that focus on offering home mortgage loans. A license is an agreement to produce and market another company’s product in exchange for a royalty or fee. Answer: TRUE Explanation: A license is […]

The federal government recognizes a sole proprietorship as an independent taxable entity. Brand communities refer to formal or informal groups of people united by their interest in and ownership of particular products. Answer: TRUE Explanation: Brand communities refer to formal […]

The number of units of one currency that must be exchanged for a unit of the second currency is known as the exchange rate between the currencies. One of the most significant changes that the social communication model has brought […]

Theory Y-oriented managers believe that employees like to work. Autocratic leaders allow subordinates to make all the decisions concerning their performance. Answer: FALSE Explanation: Autocratic leaders control the decision-making process in their organizations, often restricting the decision-making freedom of subordinates. […]

Providing education in return of fees is an example of a service. One of the fundamental consumer rights that form the basis of much of the consumer-related legislation in the United States is the right to know the lowest available […]

The thinking behind celebrity involvement in advertising is that people will be more inclined to use products endorsed by a celebrity because they will identify with and want to be like this person. Venture capital is an example of private […]

Unlike with the other classical theories, there is a lot of research to validate Herzberg’s two-factor theory. Targeted display advertising allows customers or website visitors to opt-in to mailing lists. Answer: FALSE Explanation: Targeted display advertising involves ads with graphical […]

Core competencies are those activities in which a company excels and has the potential to create competitive advantages. Money-market funds are financial instruments that invest in stocks considered to be selling below their true value. Answer: FALSE Explanation: Money-market funds […]

The ________ to resolving ethical dilemmas involves choosing the option that delivers the most good for the most people (or protects the most people from a negative outcome). A) justice approach B) utilitarian approach C) individual rights approach D) individual […]

The chief operating officer is the highest-ranking officer of a corporation. Roughly, 10 percent of U.S. workers can be categorized as contingent employees. Answer: FALSE Explanation: Contingent employees fulfill many of the responsibilities of regular employees but on a temporary […]

Providing short-term loans to countries that are unable to meet their financial obligations is a primary function of the International Monetary Fund. Corrections will not lead to performance improvements at the leverage point. Answer: FALSE Explanation: At the leverage point, […]

A partnership is a company that is owned by two or more people but is not a corporation. Destructive conflict can lead to win-lose or lose-lose outcomes, in which one or both sides lose, to the detriment of the entire […]

At DBT Enterprises, when an employee is late for a meeting, it is an informal rule that he or she must pay $2 to the “party fund.” When there is enough money in the “party fund,” the company has a […]

Capital structure is ________. A) the original monetary value of an economic item B) a statement of the financial position of a company C) the summary of the financial balances of a business D) a firm’s mix of debt and […]

Skim pricing refers to introducing a new product at a low price in hopes of building sales volume quickly. Trade that takes place without interferences is known as free trade. Answer: TRUE EXPLANATION: Trade that takes place without interferences such […]

Quality of hire measures ________. A) the amount of money spent in hiring and training new employees B) the level of productivity of employees in the probationary period C) how closely incoming employees meet the company’s needs D) the percentage […]

The exchange of value between parties is referred to as a(n) ________. A) emolument B) sale C) purchase D) transition E) transaction In Herzberg’s two-factor theory, hygiene factors are ________. A) associated with dissatisfying experiences B) mostly intrinsic and include […]

Riban Industries is a manufacturer of watches. The company’s profits are predictable and the stock yields huge dividends, although the prospects for growth are low. Riban Industries is an example of a(n) ________ stock. A) blue chip B) income C) […]

In the United States, a corporation is called a domestic corporation if it ________. A) does business only in the state where it is chartered B) files income taxes with the U.S. government C) does business only within the United […]

Cash basis is an accounting method in which revenue is recorded when a sale is made. The paid display or use of products in television shows, movies, and video games is referred to as media mix. Answer: FALSE Explanation: The […]

A firm’s suppliers are not part of its value chain. When a manager has many employees reporting directly to her, she has a narrow span of control. Answer: FALSE Explanation: The number of people under one manager’s control is known […]