BUS-115 Introduction to Business Test 1 Review Questions Questions from Quiz 1 1. A general rise in the level of prices is called a. free enterprise. b. inflation. c. gross domestic product. d. depression. e. monopoly. 2. A market situation in which there are many buyers and sellers of a product, and no single buyer or seller can control the price is . a. an oligopoly b. a monopolistic marketplace. c. a monopoly. d. pure competition. e. a laissez-faire market. 3. A system of exchange in which goods or services are exchanged without using money is called a. a barter system. b. free enterprise. c. monetary policy. d. fiscal policy. e. monopolistic competition. 4. Which of the following is not one of the four resources used by business today? a. Material b. Informational c. Governmental d. Financial e. Human5. Today, the U.S. economy is often characterized as a __________ economy. a. laissez-faire b. command c. socialist d. mixed e. Smithsonian 6. Many economists refer to the average level of output per worker per hour as a. productivity. b. inflation. c. the business cycle. d. real GDP. e. the trough. 7. Which of the following is not one of the four states in a business cycle? a. Peak b. Recession c. Trough d. Recovery e. Deficit 8. One factor that influences ethical decision making is the __________ factor. a. business b. consumer c. marketing d. opportunity e. internal 9. A plan designed to increase the number of minority employees at all levels within an organization is called a. the hard-core unemployed. b. an affirmative action program. c. the Equal Employment Opportunity Commission. d. the socioeconomic initiative. e. the right to work. Page 2 of 1910. A guide to acceptable and ethical behavior is known as a. a code of ethics. b. business ethics. c. a social audit. d. consumerism. e. an ethical behavior guide. 11. A group of people who have been singled out for unfavorable treatment on the basis of race, religion, politics, or national origin is called a. an affirmative action group. b. the hard-core unemployed. c. a minority. d. economically disadvantaged. e. a majority. 12. A government agency with the power to investigate complaints of discrimination and to sue firms that practice discrimination is the a. National Alliance of Business. b. Equal Employment Opportunity Commission. c. NAACP. d. Federal Trade Commission. e. Interstate Commerce Commission. 13. Acid rain causes __________ pollution. a. air b. noise c. water d. land e. practically no 14. An employee’s decision to inform the press or government officials of his or her firm’s unethical practices is referred to as a. whistle-blowing. b. the corporate code of ethics. c. business ethics. d. the grapevine. e. tattling. Page 3 of 1915. Which of the following is NOT one of the Six Basic Rights of Consumers a. The Right to Safety b. The Right to be Informed c. The Right to the Lowest Price d. The Right to Choose e. The Right to be Heard 16. True or False? Less than 50 percent of small businesses fail within the first five years. 17. True or False? Business is the organized effort of individuals to produce and sell, for a profit, the products and services that satisfy society’s needs. 18. True or False? The business cycle consists of two or more consecutive three-month periods of decline in a country’s GDP. 19. True or False? Profit is the payment that business owners receive for assuming the considerable risks of ownership. 20. True or False? Approximately one-third of our nation’s total production consists of consumer products. 21. True or False? A monopoly is a market (or industry) with only one or two sellers. 22. True or False? The economic model of social responsibility places emphasis not only on profits but also on the impact of business decisions on society. 23. True or False? Consumerism consists of all those activities that are undertaken to protect the rights of consumers in their dealings with business. 24. True or False? Whistle-blowing is an attempt by business to stop employees from exposing their unethical business behavior. 25. True or False? A policy of considering only nonminority applicants for job openings is called reverse discrimination. Page 4 of 19Short Essay Questions 1. What are the four basic economic questions? How are they answered in a capitalist economy? 2. Describe the four fundamental issues required for a laissez-faire capitalist economy. 3. What are the major differences between the economic model of social responsibility and the socioeconomic model? Page 5 of 19Questions from Quiz 2 1. The selling and shipping of raw materials or products to other nations is called a. importing. b. exporting. c. balance of trade. d. balance of payments. e. dumping. 2. A type of trade restriction that limits the amount of a particular good that may be imported into a country during a given period of time is a. a tariff. b. an import quota. c. an embargo. d. foreign-exchange control. e. currency devaluation. 3. An organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies is a. European Free Trade Organization. b. a global community. c. an economic community. d. an international economic organization. e. a strategic alliance of nations. 4. A firm that operates on a worldwide scale is called a. a multinational enterprise. b. a multilateral development. c. the Export-Import Bank of the United States. d. the International Monetary Fund. e. a strategic alliance. 5. Which of the following arranges the sale of products to foreign intermediaries for a commission or fee? a. Export/import merchant b. Export/import agent c. Sales office or branches d. Joint venture e. Franchisor Page 6 of 196. A reduction of the value of a nation’s currency relative to the currencies of other countries is called a. an embargo. b. foreign-exchange control. c. currency devaluation. d. a quota. e. currency appreciation. 7. Which of the following extends and guarantees credit to overseas buyers of American goods and services, guarantees short-term financing for export, and discounts negotiable instruments that arise from export transactions? a. Eximbank b. International Monetary Fund c. Multilateral development banks d. Bank of Washington, D.C. e. National Trade Data Bank 8. An argument against trade restriction is a. to