The government can influence the availability of capital through the use of the Federal
Reserve System.
Bankruptcy is the court-granted permission not to pay some or all debts.
Companies with an existing distribution network are at a disadvantage in the global
context.
A portfolio represents the proportion of funds invested in each of the investment
alternatives.
Most products are well suited to distribution by high-speed digital transmission.
A company should select the same kind of production used by most of its competitors.
An escalation of commitment indicates the increased support of all members leadership
in the action.
Enterprise resource planning (ERP) may allow a firm to check on the status of any
customer order for specific products.
One drawback of nondirect distribution is higher prices.
Inflation results in increased purchasing power for the consumer.
The primary goal for the standard practices and principles in accountant reporting is to
ensure external users that the information is accurate and has meaning.
A firm first sets its strategies and then focuses attention on goals to accomplish them.
Operations control includes materials management and quality control.
Geographic departmentalization divides firms according to the areas of the country or
the world that they serve.
Most successful entrepreneurs have a strong desire to be their own bosses.
Bookkeeping is a comprehensive system for collecting, analyzing, and communicating
financial information.
Many firms have turned to distribution through supply chains as a cornerstone of
business strategy.
Activity ratios allow investors to compare the relative efficiencies of similar companies.
Business ethics refers to ethical or unethical behaviors by employees in the context of
their personal lives.
Major innovations are most likely to come from large corporations.
Equity theory is based on the premise that workers prefer a workplace where all
employees are paid equally.
The most liquid asset for a firm is marketable securities that can be sold very quickly.
Although advising and underwriting may be tasks of an investment bank, distribution of
new securities is NOT one of their services.
The goal of supply chain management is better overall flow in the system.
The New York Stock Exchange, the world’s oldest electronic stock market, has orders
gathered and executed exclusively on a computer network.
The Occupational Safety and Health Act of 1970 is the single most comprehensive
piece of legislation regarding workplace safety and health.
Banks are subject to prosecution when they fail to maintain systems for identifying and
reporting suspicious activities.
The terms outsourcing and offshoring can be used interchangeably, as they have the
same meaning.
Virtual leaders don’t need to concern themselves with creating and maintaining
relationships with their employees.
A strong corporate culture directs employees’ efforts and helps everyone work toward
the same goals.
An investment bank operates in the secondary securities market.
Product differentiation is common in a market characterized by monopolistic
competition.
A value package consists of an in-store advertisement that makes the product attractive
and identifies features and benefits.
Shopping goods are purchased more often than convenience goods.
Sales promotions are short-term promotional activities designed to stimulate consumer
buying or cooperation from distributors, sales agents, or other members of the trade.
Affect is one of the three components of attitude.
ISO 9000 is a certification program attesting to the fact that a factory, laboratory, or
office has improved its environmental performance.
Electronic commerce (e-commerce) is popular with consumers, but has hurt
productivity.
The institutional market is made up of businesses that buy goods to be converted into
other products or that are used up during production.
If the United States exports more to the Netherlands than it imports from the
Netherlands, the United States has a trade deficit with the Netherlands.
In an oligopoly, when one firm reduces its prices, how do other sellers react?
A) There is no reaction from other firms to change their prices.
B) Other firms reduce their prices also, usually quite quickly.
C) Other firms may reduce their prices, but usually gradually.
D) Other firms are not usually aware that price has changed.
E) There is a combined response from other firms to stabilize prices.
Where are firewalls typically located?
A) Where the internal network and the internet meet
B) In the formal security policy guidelines
C) On the internal router
D) In the anti-virus software
E) In the encryption system
What is the term for the profits that are distributed to all owners of a corporation?
A) Tender
B) Interests
C) ESOP
D) Dividends
E) Yield
Why should there be universal accounting procedures?
A) To allow for the international promotion of CPA
B) To allow stakeholders to interpret and compare financial statements accurately
C) To ensure conformity to U.S. standards of ethics
D) To ensure all multinational firms report information accurately
E) To prevent fraudulent business operations
Which of the following denotes the practice of protecting domestic business at the
expense of free market competition?
A) Fair trade
B) Balanced trade
C) Free trade
D) Market liberalism
E) Protectionism
When an activity benefits an individual but not the employer, what ethical dilemma has
been created?
A) Lack of social responsibility
B) Violation of the code of conduct
C) Conflict of morals
D) Interaction with primary agents of interest
E) Conflict of interest
Which term describes the idea that quality belongs to each person who creates it while
performing a job?
A) Quality control
B) Quality ownership
C) Quality circles
D) Total quality management
E) Quality improvement teams
Which of the following is the federal government agency that regulates U.S. securities
markets?
A) New York Stock Exchange
B) Federal Reserve
C) Commerce Department
D) Securities and Exchange Commission
E) Treasury Department
How can an organization minimize the potential damage caused by inaccurate
information spread through the grapevine?
A) Ban employees from using the internet and e-mail for personal reasons.
B) Identify a list of off-limit topics.
C) Respond vigorously to inaccurate information.
D) Allow new information to be released only through formal communication channels.
E) Keep groups small and focused.
Which of the following helps entrepreneurs gain skills that are essential for running a
business?
A) ESOP
B) SBICs
C) SEC
D) LLC
E) SBA
An organization retrenches by increasing its investment in a particular area.
A company decides to introduce a line of crackers made with organically grown grains
and vegetables. What environmental trend is the company responding to?
A) Competitive
B) Sociocultural
C) Political-legal
D) Economic
E) Technological
Which of the following agencies guarantees the safety of all of its members’ bank
accounts?
A) Internal Revenue Service
B) Federal Open Market Committee
C) Federal Reserve Bank
D) Federal Deposit Insurance Corporation
E) Federal Exchange Commission
What kind of organization becomes more responsive to its environment by breaking the
company into more manageable units?
A) Centralized
B) Decentralized
C) Geographic
D) Process-oriented
E) Customer departmentalized
Which of the following is represented by a relatively stable set of psychological
attributes that distinguish people from others?
A) Differences
B) Attitude
C) Personality
D) Extroversion
E) Emotional intelligence
Which of the following goals is a primary purpose of tariffs on imports?
A) Maintain domestic competitiveness
B) Decrease exports
C) Increase imports
D) Subsidize domestic industry
E) Promote free trade
Because job permanence is less likely in today’s economy, which of the following are
some companies offering in order to keep the psychological contract in balance?
A) Additional promotions
B) Increased loyalty inducements
C) Fewer training opportunities
D) Flexible scheduling
E) More negotiated benefits
Which of the following aspects of the psychological contract is provided by the
organization?
A) Competency
B) Effort
C) Time
D) Status
E) Talent
Which of the following companywide incentive plans distribute bonuses to employees
when a company’s costs are reduced through greater work efficiency?
A) Wage setting plans
B) Pay-for-performance plans
C) Profit-sharing plans
D) Gainsharing plans
E) Pay-for-knowledge plans
Which of the following is a key activity in relationship marketing?
A) Approaching
B) Presenting and demonstrating
C) Handling objections
D) Closing
E) Following up
What decision-making state occurs when identifying each alternative and the associated
costs and payoffs of those alternatives?
A) A state of recognition
B) A state of risk
C) A state of rationality
D) A state of certainty
E) A state of uncertainty
In tall organizations, which feature describes the span of control?
A) Short
B) Tall
C) Wide
D) Narrow
E) Vertical
Which statement is true regarding independent agents?
A) They represent one firm at a time.
B) They usually specialize in a particular product.
C) They act as sales representatives.
D) They are usually based at domestic offices.
E) They do not monitor or address customer satisfaction.
What is the role of the International Monetary Fund?
A) To provide long-term loans to member countries
B) To provide a system of rules and procedures for member countries who trade with
each other
C) To limit the amount of loans available to member nations who have negative trade
balances
D) To encourage the development of a system for international payments
E) To determine the value of currency and exchange rates for member nations
What is the advantage of an organizational structure that is unstructured and informal?
A) Decisions can be made by consensus.
B) There is less effect on the organization in a rapidly changing market.
C) Managers do not become overwhelmed with decision making.
D) It can become a more complex structure quickly and efficiently.
E) The structure is more adaptable to the environment.
Which of the following tracks which service or products will be produced and when?
A) Master operations schedule
B) Detailed schedule
C) Gantt chart
D) Staff schedule
E) PERT chart
Which of the following is the fastest and most expensive transportation mode?
A) Railroads
B) Airplanes
C) Pipelines
D) Water carriers
E) Trucks
Why is a company’s owners’ equity important for investors and lenders?
A) Owners’ equity indicates potential profit.
B) Owners’ equity determines how quickly liabilities will increase.
C) Owners’ equity determines how much will be paid out as dividends.
D) Owners’ equity indicates how much the owner has invested in the company
E) Owners’ equity indicates the level of security.
How can companies reduce the cost and delays involved in entering new markets?
A) By selling items at a loss when determining international pricing
B) By redeveloping the product from scratch to better meet consumer needs in the new
market
C) By avoiding the traditional U.S.-based marketing mix
D) By utilizing existing international distribution systems
E) By establishing new and unique promotions for the new market.
Which of the following resulted from NAFTA?
A) Companies from other countries, such as Japan, have made fewer business
investments in North America.
B) U.S. exports to Mexico have decreased.
C) Mexican imports to the United States have increased.
D) More jobs have been created than what was originally predicted.
E) More U.S. jobs were eliminated than what was originally predicted.
The sameness of product quality from unit to unit is referred to by which term?
A) Utility
B) Reliability
C) Performance
D) Consistency
E) Quality control
Why are lenders most willing to loan to corporations?
A) Continuity and legal status are assured.
B) Links with owners and founders are established.
C) Professional management teams can be changed.
D) Commitment to expansion is readily available.
E) Brand and marketing strategies can be diversified.
What is formed when a corporation establishes a trust on behalf of employees for the
purpose of buying shares of ownership?
A) Institutional ownership
B) Divestiture
C) Strategic alliance
D) Corporate governance
E) Employee stock ownership plan (ESOP)
Which of the following best describes the revenues of an organization?
A) Gross profit compared to operating expenses
B) Value of revenues compared to cost of revenues
C) Yearly receipts and cash payments
D) Cost of obtaining materials needed to produce products
E) Funds that flow into the business from the sale of the goods or services provided
Which of the following does NOT fall into the degrees of competition continuum?
A) Perfect competition
B) Monopolistic competition
C) Competitive advantage
D) Oligopoly
E) Monopoly
Explain each step in the consumer buying process.
Explain the concept and importance of ethical leadership.
Why might an entrepreneur wish to purchase an existing business rather than start one
from scratch?
Discuss the potential benefits to the employer from a flextime program.
What advantages do smaller companies have over larger competitors when it comes to
the distribution aspect of the marketing mix?
Briefly describe the five basic forms of departmentalization.
Discuss the four main purposes of organizational goal setting.
List and describe three advantages of a divisional structure.
Explain fixed assets and how accountants spread the cost of an asset over the years of
its useful life.
Discuss the two forms of planned economies and give examples of each.
Describe a situation in which a company might adopt a pricing objective other than
profit maximization.
Describe how organizations create and communicate their organizational structure.
How does a product mix differ from a product line?
Describe the three distinct bodies of corporate governance that are specified in a
corporation’s bylaws.
Differentiate between high- and low-contact processes. Give an example of each.
Describe two alternatives for production facility layouts.
Identify two arguments against social responsibility as a business goal.
What are the basic steps in decision making?