question

1. One drawback of socialism is that it may result in a reduction in the individual's incentive to work hard.

answer

True

question

2. Global economics and politics have no significant influence on businesses in the United States.

answer

false

question

3. Sarah owns a bakery that specializes in cupcakes. Until recently, she charged a price of $5 for each treat. At this price Sarah's customers bought an average of 384 cupcakes each week. For the last few weeks, she has reduced her price to $3.95 per cake, and her customers have purchased an average of 596 cupcakes each week. These results are consistent with the economic concept of demand.

answer

true

question

4. In recent years, U.S. manufacturing sector has experienced ___________ productivity.

answer

rising

question

5. In socialist economies, the government owns some, if not most, basic businesses such as telecommunications systems and utilities

answer

true

question

A free market is one in which decisions about what to produce and in what quantities are made by:

answer

the market

question

If a shortage exists for a good in a free-market economy, the:

answer

price of the good will rise

question

Demand refers to the quantity of a good that consumers are willing and able to buy at different prices at a specific time.

answer

true

question

Adam Smith believed the self-interest of business people would lead them to create needed goods, services, and jobs.

answer

true

question

In a mixed economy, the government's goal is to grow the economy and maintain some measure of social equality.

answer

true

question

Fiscal policy involves increases or decreases in:

answer

government spending and taxes

question

Inflation refers to the persistent rise in the purchasing power of money.

answer

false

question

Monica notices that just a few big companies produce the vast majority of soft drinks. She would be correct in describing the soft drink industry as an oligopoly.

answer

true

question

An economy is said to be in a recession if GDP declines for two or more consecutive quarters.

answer

true

question

An oligopoly is a market that is characterized by:

answer

a few large sellers who dominate the market

question

A command economic system is characterized by:

answer

reliance of the government to determine what is produced and who gets the output.

question

At the equilibrium price, the quantity consumers desire to buy equals the quantity sellers desire to sell.

answer

true

question

In a free-market economic system, the mechanism of __________ is the key determinant used to signal to producers what to produce and how much to produce.

answer

price

question

Governments that were predominantly capitalist are moving toward socialism, while governments that were predominantly socialist are moving toward capitalism.

answer

true

question

Keynesian economic theory suggests:

answer

short-term increases in government spending to stimulate the economy.

question

A simple supply curve shows a relationship between the:

answer

price of a good and the quantity of that good sellers are willing to offer for sale at a specific point in time.

question

John complained to his buddy, Frank, that prices have increased a lot over the past year. Frank disagreed, saying that the prices of some goods have gone up a bit, but other prices have declined, noting that you can get some good buys on houses right now. Frank feels that the average price of consumer goods hasn't changed. Frank and John can refer to the __________ to learn how government economists currently view the price situation.

answer

cpi

question

Efforts by the Federal Reserve Bank (the Fed) to control the money supply and interest rates are known as:

answer

monetary policy

question

One of the greatest concerns associated with capitalism is that:

answer

some business people may let greed guide their behavior

question

Like most nations, the United States has a mixed economy.

answer

true

question

Emerson, Inc., reported that it owns and operates 265 companies worldwide with 23% of its sales coming from Europe, 18% from Asia, 46% from the U.S., and 13% from other parts of the world. Clearly, Emerson exemplifies ______________.

answer

a multinational coroporation

question

Denmark requires foreign companies that sell butter in Denmark to sell it in cubes, not tubs. This type of requirement is known as a:

answer

non tariff barrier

question

Current trade data indicates that the nation of Bogusland exports more to other nations than it imports. Bogusland has:

answer

a trade surplus.

question

Granting a foreign company the right to manufacture your product or to use your firm's trademark in return for a fee is called:

answer

licensing

question

In order to level the playing field in trade between the U.S. and China, U.S. policymakers have called upon China's government to allow the yuan to float freely, as other world currencies. Through government regulation, China maintains an undervalued currency, which results in:

answer

maintaining robust Chinese exports and a favorable balance of trade for China.

question

A sociological challenge that must be overcome in order to be successful in the global market is:

answer

a lack of cultural understanding.

question

As the most powerful economy in the world, the United States does not need to concern itself with having an unfavorable balance of payments.

answer

False

question

As a business strategy, the strategy behind "dumping" is to __________.

answer

gain a foothold in a new market

question

A devaluation of the U.S. dollar would make American goods cheaper to foreign buyers.

answer

true

question

A free-trade agreement is likely to result in:

answer

an increase in imported goods and services.

question

In an effort to protect domestic jobs, some countries will place a limit on the number of certain types of products that can be imported. These limits are called:

answer

import quotas.

question

An example of foreign direct investment would be Pepsi granting a Japanese firm the use of its formula and trademark, for a fee.

answer

false

question

An example of a U.S. import would be the purchase of oil by U.S. companies from Saudi Arabia.

answer

true

question

Free trade is the movement of goods and services between nations without political or economic barriers.

answer

true

question

A form of foreign direct investment, where a domestic company purchases a company in a foreign country to produce a similar product or service, is a:

answer

foreign subsidiary.

question

Export trading companies:

answer

connect sellers in the U.S. with buyers in other nations, and help with customs, documentation and payments.

question

From a sociocultural perspective, U.S. business people are often accused of ethnocentricity.

answer

true

question

Companies may have several reasons for creating joint ventures. Which of the following statements is one reason why firms may decide to form a joint venture?

answer

They will save time to market if they pool their technological know-how.

question

A __________ is a partnership in which two or more companies (often from different countries) join together and share the risk and costs in order to undertake a major project.

answer

joint venture

question

An influential foreign government official approaches your firm requesting a large sum of money. In return for this bribe, the official promises that your firm will receive preferential treatment in future government contracts. You refuse the request, explaining that the _________ Act of the United States prohibits you from making such payments.

answer

Foreign Corrupt Practices

question

A major concern voiced by U.S. critics of the North American Free Trade Agreement (NAFTA) was that it would result in:

answer

loss of jobs in the U.S. economy.

question

Comparative advantage theory states that a country should sell to other countries those products that it produces most efficiently and buy from other countries those products it cannot produce as efficiently.

answer

true

question

As students think about a career in the business world today, which of the following is a good strategic suggestion?

answer

Study a foreign language.

question

China has approximately 95% of the world's Neodymium, a rare earth metal used in consumer and military electronics and contemporary technology. The fact that this is a necessary metal for the production of many products we use today—everything from smartphones to smart bombs—means China can almost name its price! Which of the following describes this situation?

answer

China has a near absolute advantage in Neodymium.

question

Casey is typical of many U.S. businesspeople. Casey feels the U.S. culture defines the model for the rest of the world, and that the "American way" of doing things is the best. Casey is guilty of:

answer

ethnocentricity.

question

Two recent studies found a strong correlation between academic dishonesty among undergraduates and dishonesty at work.

answer

true

question

One good reason for managing a business ethically is to help reduce employee turnover.

answer

true

question

Often it is the threat of negative publicity that pressures businesses to enforce their corporate code of ethics.

answer

true

question

The majority of CEOs blame unethical employee conduct on:

answer

a failure of leadership to establish ethical standards.

question

Purposefully understating your firm's income to avoid paying higher taxes is an example of:

answer

illegal behavior.

question

Legal behavior and ethical behavior are basically the same.

answer

false

question

When WorldCom used intentional accounting irregularities to make the company look more profitable than it actually was, it:

answer

engaged in illegal behavior.

question

The difference between an organization's positive social contributions and its negative social impacts is called their:

answer

net social contribution.

question

________ refers to standards of moral behavior.

answer

Ethics

question

Last week, the Local Citizens for a Greener America sent a formal document to Chipper's Golf Resort asking the private club to measure its carbon footprint and publicly disclose the amount of fertilizer and other carbon-emitting substances that it uses on its two award-winning golf courses. LCGA is an example of _________.

answer

a watchdog group

question

A firm's carbon footprint is:

answer

the amount of carbon it releases in its effort to do business.

question

Overly ambitious business goals and employee incentives can lead to unethical behavior.

answer

true

question

Top leaders in government and business today are:

answer

held to higher ethical standards than in the past.

question

Some investors believe it makes financial as well as moral sense to invest in companies whose practices promote sensitivity toward the environment.

answer

true

question

Moral behavior refers to behavior that is accepted by society as right versus wrong.

answer

true

question

U.S. businesses have little influence over the behavior of businesses from other countries.

answer

false

question

Last year the Bank of Plenty, Inc., made an all-out effort to go paperless. The bank's public relations arm promoted the strategy both internally and externally. Customers were strongly encouraged to utilize the bank's online banking for all their banking needs. Customers could sign up for local workshops where employees were dedicated to showing them how to navigate the bank's new website and find the information they required. The bank's initiative demonstrates:

answer

an area where the firm can contribute to the green effort, as well as cut costs.

question

Many businesses have developed internal procedures to enforce their ethical policies. Which of the following is an example of an outside group urging ethical behavior in businesses?

answer

union officials

question

When Donut Plaza employs in-store recycling and composting, and uses nontoxic cleaners, Donut Plaza is participating in:

answer

corporate responsibility.

question

Which of the following is an unresolved ethical issue that surrounds global trade?

answer

Labor standards

question

Many Americans define ethical behavior according to the situation in which they find themselves. This suggests that there may be situations where ________ to cheat, steal, or lie.

answer

it might be okay

question

While speaking with his sales force, the director of sales explains, "Anyone caught violating a sales law will be fired." After studying business ethics, you recognize this remark as a reference to the firm's __________ ethics.

answer

compliance-based

question

While telling an abusive joke about an ethnic group may not be unlawful, it is unethical.

answer

true

question

Sharon, a CPA for a large firm, noticed that the company's accounting records drastically overstated the amount of inventory on hand, which led to overstating the assets of the firm. Initially, she brought it to the attention of her supervisor, but when nothing was done to correct the mistake in a timely manner, she decided the best course of action was to report it to the appropriate government official. Although her actions took her outside the company, she was counting on current law, under the __________, to protect her against company retaliation.

answer

Sarbanes-Oxley Act

question

Sharon, a CPA for a large firm, noticed that the company's accounting records drastically overstated the amount of inventory on hand, which led to overstating the assets of the firm. Initially, she brought it to the attention of her supervisor, but when nothing was done to correct the mistake in a timely manner, she decided the best course of action was to report it to the appropriate government official. Although her actions took her outside the company, she was counting on current law, under the __________, to protect her against company retaliation.

answer

Sarbanes-Oxley Act

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