Bus & Finance Test 2

Question 1

The instructions that the student has to follow while in a cooperative work experience program are framed by the:

Training station supervisor
Cooperative education coordinator
Placement department coordinator
Soft skills counselor

Answer 1

Cooperative education coordinator

The cooperative education coordinator has all the responsibility to frame instructions that the student should follow. This should be done keeping in mind the requirements of the employer as well as what benefits are expected from it for the student.

Question 2

People are motivated by needs. The good business person will consider the other person’s needs. Abraham Maslow produced a hierarchy of needs for humans. According to Maslow the most basic needs are which of the following?

safety and security
physiological
social
esteem and status

Answer 2

physiological

Maslow considered the most basic needs to be physiological. These needs include the things necessary for survival such as air, water, food, sleep and shelter.

Question 3

In which of the following storage medium can records that need alteration to keep them up to date be stored today?

punched cards
hard disk
CD-ROM
DVD

Answer 3

hard disk

If a record needs to be altered repeatedly it has to be stored on a medium that allows both read as well as write capabilities. Also the technology should be current for the best result. Hence, the appropriate answer would be a hard disk.

Question 4

A high school student gets an opportunity to observe first hand what is done by the operations manager of a local supermarket. Which of the following would describe this?

Career Research
Internship
Job Shadowing
Job Observation

Answer 4

Job Shadowing

Job Shadowing is an academically motivating activity designed to give children the unique opportunity of an up-close look at the world of work. This helps them make appropriate choices and answer the question, “Why do I have to learn this?”

Question 5

When writing a business memo the heading segment should include all but which of the following?

readers’ names and job titles
writer’s name and job title
date
action desired

Answer 5

action desired

This is not part of the heading segment in a properly written memo. The heading segment should include all of the other choices and the subject (what the memo is about, briefly)

Question 6

The capacity of a communication device to convey information effectively is called:

efficiency
productivity
channel richness
organizational communication

Answer 6

channel richness

The capacity of a communication channel to convey information effectively is called channel richness. Face-to-face communication is the most effective.

Question 7

The strategies to teach a student with special needs are contained in the

Disciplinary record
Medical needs report
Assessment Record
Individualized Education Plan

Answer 7

Individualized Education Plan

The Individualized Education Plan is a special record created with the help of medical professionals, parents and other faculty which contains the strategies that are to be used while teaching the student.

Question 8

Which word would you NOT use to describe an accomplishment on a resume?

Coordinated.
Constructed.
Trained.
Attempted.

Answer 8

Attempted

Attempted is a weak verb. When creating a resume, it is important to use strong, specific verbs. The other answers are appropriate.

Question 9

Which of the following sentences is correct?

Its not its most reliable product.
It’s not it’s most reliable product.
It is not it’s most reliable product.
It’s not its most reliable product.

Answer 9

It’s not its most reliable product.

It’s is a contraction for it is or it has. Its is a possessive pronoun. If there is any doubt whether to use its or it’s in a particular context, try substituting the words it is or it has. If the substitution doesn’t make sense, use the (apostrophe-free) possessive pronoun its.

Question 10

Negotiation is a rapidly growing technique for handling conflict. The type of negotiating in which a solution is reached that enhances both parties and produces high joint benefits is which of the following?

distributive bargaining
integrative bargaining
mediation
one-sided bargaining

Answer 10

integrative bargaining

Integrative bargaining is a situation in which negotiators reach a solution that enhances both parties and produces high joint benefits. Each party looks out for its own interests, with the focus shifting to problem solving from reducing demands to expanding the pool of resources.

Question 11

Complexity communication is presented as an integrated process for improving the effectiveness of communication. It is based on three behaviors. Of the following, which one is not one of these behaviors?

critical language
critical listening
critical questioning
critical thinking

Answer 11

critical language

Complexity communication leads to collective mindfulness. It is based on three behaviors: critical listening, critical questioning, and critical thinking. “Critical” in this sense has roughly the same meaning as analytical.

Question 12

The sender, feedback, message, and receiver make up which of the following?

Communication type.
Communication channel.
Communication environment.
Communication process model.

Answer 12

Communication process model There are four components in the communication process model. The sender and receiver communicate the message. Barriers may block communication.

Question 13

In a file management system which of the following would be the first step?

Determine what records are most important
Conduct a records inventory
Develop a file plan and filing procedures
Develop recordkeeping requirements

Answer 13

Determine what records are most important

The keys to good filing practices are filing only what is necessary to file, filing it in a way that facilitates access and disposition and doing it consistently. This ensures records can be accessed easily and reduces clutter.

Question 14

To judge a class on a skill set that is essential, which of the following would be the best way for assessment?

Summative Assessments
Formative Assessments
Criterion-based Assessments
Normative Assessments

Answer 14

Criterion-based Assessments

In the case of a skill set that is essential a criterion-based assessment is the best as this judges if the person knows the required skills to the appropriate level. It will not allow a person to score a high grade just because the peer’s knowledge is worse.

Question 15

In which of the following would call-back notes, follow-up reminders, maintenance reminders, or any other papers that require future action be filed?

Action File
Tickler File
Master File
Classic File

Answer 15

Tickler File

A tickler file is a collection of date-labeled file folders organized in a way that allows time-sensitive documents to be filed according to the future date on which each document needs action. Everyday the folder having the current date is retrieved from the tickler file and the required actions performed.

Question 16

Describing job responsibilities should include ____ for a holistic interview.

General duties.
Specific tasks.
Job description.
Anecdotes.

Answer 16

Specific tasks.

A holistic interview is designed to learn about the whole employee. The question is meant to show the ability to problem solve. Giving specific information is better than listing general duties from a job description.

Question 17

Which of the following is not a form of a grading scale used in educational institutions?

Nines System
Sevens System
Bell Curve Grading
Fourteens System

Answer 17

Fourteens System

The Sevens, Eights and Nines Systems give grades based on the marks attained by students. The Bell Curve Grading is based on a relative grading of students in a particular group. There is no grading system called the Fourteens System.

Question 18

If an American investor wants to invest in a foreign company, what usually is the instrument used?

Dollar denominated stock
American Depository Receipt
Foreign currency deposit bond
Foreign mutual funds

Answer 18

American Depository Receipt

American Depository Receipts are stocks issued by U.S. depositary banks. Each ADR represents one or more shares of foreign stock or a fraction of a share. If you own an ADR, you have the right to obtain the foreign stock it represents.

Question 19

Which of the following sentences is correctly punctuated?

The report is due today, the proposal is due tomorrow.
We will bill you unless you want to send a check today?
The study included; capital requirements, management, and personnel needs.
The instructions read, “In case of a problem, call the customer service representative.”

Answer 19

The instructions read, “In case of a problem, call the customer service representative.”

The instructions read, “In case of a problem, call the customer service representative.” is correctly punctuated. A comma is used to separate a quotation from the rest of the sentence.

Question 20

A room temperature that is too high is a/an _____.

Capability barrier.
Appearance barrier.
Poor word choice.
Environmental barrier.

Answer 20

Environmental barrier.

The environmental barriers affect the environment of the receiver. Room temperature that is too high or too low will create an environmental barrier.

Question 21

When an investor borrows money from a bank to invest in the stock market which of the following is he using?

Hedging
Leverage
Amortization
Reinvestment

Answer 21

Leverage

Buying stocks using borrowed money is referred to as leveraging. It gives investors a chance to make a higher profit though the loss that they would have to suffer also goes up by the same extent.

Question 22

Letters and memos are Not useful when what is necessary?

Immediate feedback.
Communication.
Communication environment.
Complex ideas.

Answer 22

Correct answer: Immediate feedback Verbal communication is typically used when immediate feedback is necessary. Written communication in forms of email provide immediate feedback.

Question 23

Which of the following would NOT be a factor of successful negotiation?

separating the people from the problem
inventing options for mutual gains
focusing on positions, not interests
insisting on objective criteria

Answer 23

focusing on positions, not interests

Negotiation can be thought of as a formal process or as a political process. Focusing on positions, not interests, is the opposite of what would be done in successful negotiation. You should focus on interest, not positions.

Question 24

Why will a teacher want to contact members of various businesses around the school and know their views before designing a school curriculum?

The curriculum should be prepared so that students have the abilities which are actually required by the businesses where they will be employed.

The Management of all schools are required by legislature to have members of the business community around them.

Teachers are paid by the businesses as they want it easier for them to find new qualified employees to hire in the future.

The school’s students get opportunities for job shadowing when this is done.

Answer 24

The curriculum should be prepared so that students have the abilities which are actually required by the businesses where they will be employed.

A school curriculum should be relevant for its environment and reflect the future requirements that its students will need to have to be successful. Therefore, it is advisable to consult the local businesses to get an idea of the skills and knowledge that the students should have. This is especially important in the case of business education.

Question 25

One of the reasons for documenting research sources for a business communication is copyright law. There are some things, however, that copyright law does not protect. All of the following are NOT protected by copyright law EXCEPT:

names
familiar symbols
listings of ingredients
audiovisual materials

Answer 25

audiovisual materials

In addition to printed materials like books and magazines, audiovisual materials are protected by copyright law. A work is considered copyrighted as soon as it is put into fixed form, even if it has not been registered.

Question 26

What is an IPO Lock-up?

A refusal from the SEC to allow the IPO.
A period during which majority stockholders cannot sell their stock
A sudden drop in stock prices immediately after an IPO.
When the trading price after an IPO is less than the issue price

Answer 26

A period during which majority stockholders cannot sell their stock

An IPO Lock-up is a period of time after a company has initially gone public, usually between 90 to 180 days during which majority stakeholders in the company are forbidden to sell any of their shares. This is done to ensure the minority stockholders interest by not allowing too much supply of the company stock which will reduce its price.

Question 27

Which of the following day count conventions is used for U.S. treasury bonds and notes?

Actual/Actual ISDA
Actual/Actual ICMA
Actual/365 Fixed
Actual/365L

Answer 27

Actual/Actual ICMA

Actual/Actual ICMA insures that all coupon payments are always for the same amount. For irregular coupon periods, the period has to be divided into one or more quasi-coupon periods (also called notional periods) that match the normal frequency of payment dates.

Question 28

When calculating statistics, the same set of data can be used to produce different kinds of averages. The most commonly used average is the sum of all the items in a group divided by the number or items in the group. This is called the:

median
mode
middle
mean

Answer 28

mean

The most commonly used average is the mean. It is the sum of all the items in a group divided by the number or items in the group. The mean is useful to compare one item or individual with the group.

Question 29

The price of a currency depends on the supply of and the demand for that currency. Which of the following terms implies that one currency’s value rises relative to all other currencies?

revaluation
devaluation
positive reception
depreciation

Answer 29

revaluation

Revaluation is the increase in the price of one currency relative to other currencies. A revaluation has the effect of raising the price of domestic goods to foreigners and lowering the price of all foreign goods to the domestic population.

Question 30

Which of the following provides a chronological record?

General journal.
Account ledger.
Financial statement.
Closing entries.

Answer 30

General journal.

Recording in the general journal is the first step in the accounting process. There are many benefits to using a general journal. It provides a chronological record, which is useful in case of an audit.

Question 31

Which of the following cannot be classified as an intangible asset?

goodwill
trademark
accounts receivable
secret processes

Answer 31

accounts receivable

Accounts receivable is an amount that the business has to receive from its debtors. Therefore it is not classified as an intangible asset. All the other options are of intangible assets.

Question 32

Which of the following would not be considered to be a fixed asset?

automobiles
office copier
buildings
office supplies

Answer 32

office supplies

Office supplies are expenses. They are expected to be consumed in less than a year. They are not fixed assets. Fixed assets, also known as Property, Plant and Equipment, are tangible assets held by an entity for the production or supply of goods and services, for rentals to others, or for administrative purposes.

Question 33

A financial ratio that expresses the income statement effect from employing an asset as a percentage of the asset’s cost on the balance sheet is which of the following?

current ratio
quick ratio
debt-to-equity ratio
return on investment

Answer 33

return on investment

Return on investment or ROI is a financial ratio that expresses the income statement effect from employing an asset as a percentage of the asset’s cost on the balance sheet. It is a performance measure used to evaluate the efficiency of an investment or to compare the efficiency of a number of different investments. To calculate ROI, the benefit (return) of an investment is divided by the cost of the investment; the result is expressed as a percentage or a ratio.

Question 34

Working capital is a term that includes all of the assets in the following choices except for which one?

buildings
cash
accounts receivable
inventory

Answer 34

buildings

The short-term assets of a company like cash, cash-equivalents, accounts receivable and inventory are often referred to as working capital. The difference between its current assets and current liabilities is its net working capital.

Question 35

Short-term unsecured promissory notes issued by a corporation are which of the following?

mortgages
commercial paper
SEC debt
minimum term debt

Answer 35

commercial paper

Commercial paper is a short-term unsecured promissory note issued by a corporation. The debt is issued in denominations of $100,000 or greater and usually matures in two to six months.

Question 36

Besides reducing the temporary account balances to zero, what is the purpose of preparing closing entries?

Update general journal.
Update retained earnings account.
Update general inventory.
Update the general account ledger.

Answer 36

Correct answer: Update retained earnings account There are two reasons for preparing closing entries. The first is to reduce the temporary account balance to zero. The second is to update retained earnings account.

Question 37

Which of the following is not an advantage of a corporation over a partnership?

Stockholders have limited liability
Income is taxed as personal income
Corporations have unlimited life
Ownership is easily transferable

Answer 37

Income is taxed as personal income

This question asks you to consider the advantages and disadvantages of the different forms of business organization. Advantages of forming a corporation over a partnership include limited liability of stockholders, unlimited life, and easily transferable ownership. Income being taxed as personal income is an advantage to a partnership.

Question 38

Stock whose dividends accumulate if not paid is which of the following?

cumulative preferred stock
cumulative common stock
noncumulative preferred stock
noncumulative common stock

Answer 38

cumulative preferred stock

Cumulative preferred stock is preferred stock whose dividends accumulate (accrue) if not paid. Any omitted dividends have to be paid in the future before any dividends may be paid to the holders of the common stock. Most preferred stock is cumulative.

Question 39

What is the debt ratio of a company?

Sales/Debt
Short term debt/Long term debt
total liabilities/total assets
always equal to one

Answer 39

total liabilities/total assets

The debt ratio of a company is an indication of the amount of debt the company has borrowed to buy its assets. It is equal to total liabilities by total assets.

Question 40

Word-of-mouth is the earliest form of marketing, what is its version in marketing using the Internet called?

Viral Marketing
Word over Internet
Email Marketing
Net Marketing

Answer 40

Viral Marketing

Viral marketing is the name given to the word-of-mouth marketing over the Internet.

Question 41

What is the term used to describe a market situation in which there is only one large buyer and many small sellers?

Monopoly
Monopsony
Polyopsony
Perfect Competition

Answer 41

Monopsony

Monopsony is a situation where there is only one buyer and many small sellers.

Question 42

In the case of a floating interest rate loan taken by a person, if inflation drops, the monthly installments usually:

remain the same
decrease
Either increase or decrease
Either remain the same or decrease

Answer 42

decrease

When inflation falls, interest rates usually fall too. This provides a person with a floating interest rate loan an advantage as the monthly installments may drop.

Question 43

The combination of the present value of an investment’s cash inflows and the present value of the investment’s cash outflows is which of the following?

balanced present value
projected present value
gross present value
net present value

Answer 43

net present value

The combination of the present value of an investment’s cash inflows and the present value of the investment’s cash outflows is net present value. To compute present value amounts, the future cash flows are discounted by a specified rate. The advantages of using the net present value to evaluate investments are: all of the investment’s cash flows are used in the calculation, and the time value of money is considered because the future cash amounts are discounted to the present.

Question 44

Of the following depreciation methods, which one most accurately reflects the pattern of consumption of economic benefits?

units of activity
straight line
sum of the years’ digits
reducing balance

Answer 44

units of activity

Of the choices the units of activity method most accurately reflects the pattern of consumption of economic benefits. This method is suitable in case of fixed assets that depreciate in proportion to units of activity rather than just the passage of time. The disadvantage of this method is that it is difficult to determine and measure a reasonable basis of activity.

Question 45

Considering security transactions, those dealers who offer to buy and sell securities from their own accounts are known as which of the following?

OTC dealer
organized market dealer
odd lot dealers
market makers

Answer 45

Market makers offer to buy securities from any seller and to sell the securities to any purchaser. Market makers set a specified price at which they will buy and sell the security.

Question 46

Debt securities that mature under a year are traded in _____.

Capital markets.
Secondary market.
Money markets.
Primary market.

Answer 46

Correct answer: Money markets All of the answers are markets. Money markets trade debt securities that mature in under a year.

Question 47

The XYZ Company has retained earnings of $552,000. This represents which of the following?

additional paid-in capital
common stock of the firm
the firm’s undistributed earnings
the firm’s dividends that have been distributed

Answer 47

the firm’s undistributed earnings

Retained earnings represent the accumulated earnings of the firm that have not been distributed. It represents the firm’s undistributed earnings since its inception. Since stockholders would receive these earnings if they had been distributed, retained earnings are part of the stockholders’ contribution to the financing of the firm.

Question 48

Which of the following is the right way of posting in the process of recording financial transactions?

Journal, Ledger, Trial Balance, P&L account
Ledger, Journal, Trial Balance, P&L account
P&L account, Trial Balance, Journal, Ledger
Ledger, P&L account, Trial Balance, Journal

Answer 48

Journal, Ledger, Trial Balance, P&L account

Financial transactions are first entered into the Journal, then posted into the Ledger which is used to create a trial balance and finally the P&L account.

Question 49

A practice in which a firm sells its product cheaply into a foreign market at extremely cheap rates leading to the domestic players either incurring huge losses or shutting shop is called what?

Export
Dumping
Economic Aggression
Foreign Disruptive Practices

Answer 49

Dumping

Dumping is the economically damaging practice of flooding another country which cheap products thus destroying the native industry.

Question 50

What is the marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company called?

Multi-level Marketing
Ponzi Marketing
Direct Marketing
Referral Marketing

Answer 50

Multi-level Marketing

Multi-level Marketing is a marketing strategy that compensates promoters of direct selling companies not only for product sales they personally generate, but also for the sales of others they introduced to the company. It usually involves direct selling and advertising by word of mouth.

Question 51

What to produce in the private sector is based on _____.

Taxation.
Economic cost.
Fiscal control policies.
Consumer sovereignty.

Answer 51

Consumer sovereignty Consumer demand and spending helps determine production in a mixed economy. This is consumer sovereignty.

Question 52

A legal proceeding whereby a creditor may collect directly from a third party who is obligated to the debtor is which of the following?

attachment
garnishment
lien
none of the above

Answer 52

garnishment

A garnishment is a form of execution of a judgment. It is a legal proceeding whereby a creditor may collect directly from a third party who is obligated to the debtor, such as an employer. For instance, a portion of the debtor’s wages are paid to the court by the employer, and the court in turn pays the creditors.

Question 53

The idea that an expansionary fiscal policy will tend to increase the interest rate and reduce investment spending is known as which of the following?

political business cycle
expansionary bias
fiscal drag
crowding-out effect

Answer 53

crowding-out effect

The essence of the crowding-out effect is that an expansionary (deficit) fiscal policy will tend to increase the interest rate and reduce investment spending. This results in weakening or canceling the stimulus of the fiscal policy

Question 54

When low-cost producers in a free trade zone replace high-cost domestic producers, which of the following has occurred?

Trade creation.
Trade diversion.
Dumping.
Greenfield investment.

Answer 54

Trade creation

Trade creation occurs when low cost producers in the free trade zone replace high cost domestic producers. While this often results in increased revenues and benefit for members of the customs union, it may also end up hurting some industries through increased specialization.

Question 55

An investment that does not involve the holder obtaining any degree of control of a firm or interest is known as which of the following?

Portfolio investment.
Blind investment.
Trust fund.
Hedge fund.

Answer 55

Portfolio investment

Portfolio investments are those investments that do not involve the holder obtaining any degree of control of the company. For many people, holding stock in publicly traded companies is the most common form of portfolio investment.

Question 56

The type of tariff place on products being imported to or exported from countries with unsatisfactory pollution controls is which of the following?

prohibitive tariff
specific tariff
environmental tariff
retaliatory tariff

Answer 56

environmental tariff

A tax placed on products being imported to or exported from countries with unsatisfactory environmental pollution controls is the environmental tariff. This tariff is, in effect, a sin tax, designed to make trade with environmentally negligent countries less desirable.

Question 57

The process of clearing checks that are simultaneously counted as deposits in two banks is called:

capital reserve
discount rate
the float
interest

Answer 57

the float

The process of clearing checks that are simultaneously counted as deposits in two banks is the float. It is also called “cash items in process.”

Question 58

When an attorney asks a witness a question in such a form that the answer is obvious it is called a(n):

direct examination
hostile examination
leading question
directed question

Answer 58

leading question

When an attorney asks a witness a question in such a form that the answer is obvious it is called a leading question. For example, a question like “Isn’t it true that the contract called for you to deliver the goods on December 12, 2009?” This type of question is permitted in cross-examination.

Question 59

Which of the following is an example of a fixed cost?

Raw material.
Electricity.
Employee salaries.
Temporary salaries.

Answer 59

Employee salaries Fixed costs do not change with the output. Employee salaries would be an example of a fixed cost. The other answers are variable costs. Rent, fees, and technology are also fixed.

Question 60

The term for reducing the value of a coin by reducing the amount of precious metal in it is which of the following?

deregulating
devaluing
revaluing
debasing

Answer 60

debasing

Debasing is the term for reducing the value of a coin by reducing the amount of precious metal in it. It is still circulated at face value. This was frequently done by governments in order to inflate the amount of currency in circulation.

Question 61

One way of looking at the gross national product (GNP) is to look at it in terms of income derived or created from the production of the GNP. This is called the:

earnings approach
output approach
expenditures approach
labor approach

Answer 61

earnings approach

Looking at GNP in terms of income derived or created from the production of the GNP is the earnings approach. It is also called the income approach or the allocations approach. Looking at GNP as the sum of all the expenditures involved in taking that total output off the market is called the output or expenditures approach.

Question 62

The increase in taxes paid as additional income is obtained, divided by that increase in income is which of the following?

average tax rate
marginal tax rate
redistributed tax rate
minimal tax rate

Answer 62

marginal tax rate

The marginal tax rate is the increase in taxes paid as additional income is obtained, divided by that increase in income. The average tax rate is the total tax paid divided by taxable income.

Question 63

What is it called when an economic concept that measures the responsiveness in the quantity demand of one good when a change in price takes place in another good?

cross elasticity of demand
diminishing marginal utility
equal marginal utility
elasticity of supply

Answer 63

cross elasticity of demand

Cross elasticity of demand occurs when an economic concept that measures the responsiveness in the quantity demand of one good when a change in price takes place in another good. The measure is calculated by taking the percentage change in the quantity demanded of one good, divided by the percentage change in price of the substitute good.

Question 64

The term for the return of a case by an appellate court for further action by a lower court is which of the following?

remedy
rescission
replevin
remand

Answer 64

remand

Remand is the term for the return of a case by an appellate court for further action by a lower court. A remedy is an action that enforces a right. Replevin is an action for the recovery of goods wrongfully taken or kept. Rescission is the cancellation of a contract.

Question 65

The fact that the demand for steel workers is highly dependent on the demand for steel illustrates which of the following economic principles?

derived demand
marginal demand
marginal resource demand
derived supply

Answer 65

derived demand

Derived demand is the demand for resources derived from the finished goods and services which resources help produce. When more steel is demanded the demand for labor is a derived demand.

Question 66

Which of the following countries is NOT party to the European Free Trade Association (EFTA)?

Sweden.
Norway.
Iceland.
Switzerland.

Answer 66

Sweden.

The European Free Trade Association consists of Lichtenstein, Norway, Iceland, and Switzerland. The Association establishes free trade among the member countries.

Question 67

Opportunity cost is also called _____.

Alternative cost.
Economic cost.
Accounting cost.
Social cost.

Answer 67

Alternative cost.

Opportunity cost refers to a benefit that a person could have received, but gave up, to take another course of action. It is an alternative given up when a decision is made. Opportunity cost is equal to the return of the most lucrative option minus the return of the chosen option.

Question 68

Which of the following types of tariffs is intended to artificially inflate prices of imports and protect domestic industries from foreign competition?

specific tariff
protective tariff
prohibitive tariff
retaliatory tariff

Answer 68

protective tariff

Tariffs are usually associated with protectionism, a government’s economic policy of controlling trade between nations for the better of its own. For political reasons, tariffs are usually imposed on imported goods. A protective tariff is designed to protect domestic industries from foreign competition, especially from competitors whose host nations allow them to operate under conditions that are illegal in the protect nation, or who subsidize their exports.

Question 69

For a commodity to have value-in-exchange, three characteristics are necessary. All of the following are one of these characteristics except for:

utility
price
scarcity
transferability

Answer 69

price

The three things necessary for a commodity to have value-in-exchange are: utility, scarcity, and transferability. In economics value means the power that goods have to exchange other goods and services. This is the value-in-exchange.

Question 70

Economic utility takes many forms. When a farmer stores his wheat for a few months after harvesting and then sells it when the price rises, he has created which type of economic utility?

form utility
time utility
place utility
natural utility

Answer 70

time utility

The farmer has created time utility. By waiting to sell he has added value to his wheat. There are several types of economic utility which include: form, place, time, service, possession, knowledge, and natural utility.

Question 71

The supply factors in economic growth include all of the following EXCEPT:

the quantity and quality of a nation’s natural resources
allocative efficiency
the quantity and quality of its human resources
its technology

Answer 71

allocative efficiency

The supply factors in economic growth are: the quantity and quality of a nation’s natural resources; the quantity and quality of its human resources; its stock of capital facilities; and its technology. Two other factors which are not considered supply factors are: a sufficient level of aggregate expenditures and allocative efficiency.

Question 72

At which phase of the business cycle is the GDP at its lowest?

Trough.
Peak.
Recovery.
Recession.

Answer 72

Trough All of the answers are the four phases of the business cycle. The lowest phase of the GDP is the trough. The trough follows the recession.

Question 73

Which branch of law sets forth how rights and responsibilities can be legally exercised and enforced through legal system?

administrative law
procedural law
substantive law
tort law

Answer 73

procedural law

Procedural law sets forth how rights and responsibilities can be legally exercised and enforced through legal system. Substantive law defines legal rights and duties. It is concerned with all rules of conduct except those involved in enforcement.

Question 74

The type of damages that results from a breach of contract that is awarded to make the victim of the breach “whole” in the economic sense is which of the following?

exemplary damages
punitive damages
liquidated damages
compensatory damages

Answer 74

compensatory damages

Compensatory damages are awarded to make the victim of the breach “whole” in the economic sense. Liquidated damages can also do this but there must be a provision in the contract that sets forth the amount of damages to be awarded in the event of a breach of the contract.

Question 75

Which of the following determines who benefits from a warranty and who can bring the cause of action?

privity of contract
diagonal privity
vertical privity
horizontal privity

Answer 75

horizontal privity

Horizontal privity determines who benefits from warranty and who brings cause of action. This can be a household, people expected to use the product, or any person.

Question 76

Factors that automatically, without any actions by the government, work toward stabilizing the economy by reducing the short term fluctuation of the business cycle are which of the following?

balance of payments
allocative efficiency
aggregate demand
automatic stabilizers

Answer 76

automatic stabilizers

Automatic stabilizers are so called because they act to stabilize economic cycles and are automatically triggered without explicit government intervention. They are designed to offset fluctuations in a nation’s economic activity without intervention by the government or policymakers. Unemployment is an example of an automatic stabilizer.

Question 77

When a job interviewer asks the interviewee, “Why did you leave your last job?” Which of the following would be the MOST appropriate response?

I didn’t feel I was being paid enough for the work I was doing.
It was time for me to move on.
The company was not a good fit for my ski
My boss and I did not get along well.

Answer 77

The company was not a good fit for my skills and… The key to appropriately answering questions at an interview is to do so in a manner that is honest and diplomatic. Answering questions in a way that is unprofessional may make you appear undesirable to the interviewer.

Question 78

In terms of conducting formal meetings, which of the following terms indicates the minimum number of members that must be present to conduct business at a meeting?

quorum
parliamentary procedure
minimum vote count
maximum vote count

Answer 78

quorum

A quorum is the minimum number of members that must be present to conduct business at a meeting. This is recorded in the minutes of the meeting.

Question 79

High taxes are a disadvantage of which of the following?

Sole proprietorship.
Corporation.
Partnership.
Limited liability corporation.

Answer 79

Corporation.

There are many benefits of corporations. Higher taxes are a disadvantage. Other disadvantages include organizational expense and agency problems.

Question 80

Which of the following statements about entrepreneurship is true?

Entrepreneurship has the identical characteristics of small business.
Entrepreneurs comprise the majority of small business owners.
Entrepreneurs create something new or something different that changes or transmutes values.
None of the above

Answer 80

Entrepreneurs create something new or something different that changes or transmutes values.

This is the only true statement. Not all small businesses are entrepreneurships. The enterprise must have something special. In fact, entrepreneurs are the minority among new businesses.

Question 81

In terms of networking for career development which of the following statements is least accurate?

Ask contacts for things that are in their power to do for you.
Only ask question that can be answered with a “yes.”
Always ask for a job.
Ask the person for advice.

Answer 81

Always ask for a job.

This would be the least useful. Do not ask for a job, unless the person has one to offer.

Question 82

The term used to cover different methods for avoiding using the financial resources of external investors is which of the following?

financial bootstrapping
financial innovation
promotional financing
concept financing

Answer 82

financial bootstrapping

financial bootstrapping can be defined as “a collection of methods used to minimize the amount of outside debt and equity financing needed from banks and investors.” There are many different types of bootstrapping such as owner financing, sweat equity, and minimization of accounts receivable.

Question 83

In a multi-level marketing business, the people signed up under an individual on which the individual receives payment on their sales is which of the following?

upline
downline
vertical setup
horizontal setup

Answer 83

downline

The downline in a multi-level marketing business, the people signed up under an individual on which the individual receives payment on their sales. A multi-level marketing business is any business in which a person receives proceeds not only from their own sales, but from the sales made by people they have signed up, and potentially people those people have signed up, and so on.

Question 84

Which of the following is NOT one of McClelland’s three secondary needs?

power
affiliation
achievement
organizing

Answer 84

organizing

McClelland’s three secondary needs include: power, affiliation and achievement, not organizing. Power is used to influence others and seek positions of influence. Affiliation includes getting along with others and enjoying the company of others. Achievement includes setting challenging goals for oneself, trying hard to reach these goals and using feedback on performance to achieve goals.

Question 85

Of the following, who is MOST likely known for being adverse to risk and chooses alternative options?

Capitalist.
Manager.
Entrepreneur.
None of the above.

Answer 85

Capitalist.

There are different characteristics of managers, capitalists, and entrepreneurs. Capitalists typically avoid risks. Entrepreneurship, however, requires risk.

Question 86

Which of the following would be addressed under the financial harvest?

Cost projection
SWOT
Financial bootstrapping
Operating cash flow

Answer 86

Operating cash flow

Cash flow that comes from producing or selling a product/service is an operating cash flow. This falls under the harvest concept.

Question 87

A program of vocational education at the high-school level in which a student is employed part-time and also attending classes is which of the following?

distributive education
economic education
academic education
none of the above

Answer 87

distributive education

Distributive education is a program of vocational education at the high-school level in which a student is employed part-time and also attending classes. The student receives on-the-job training at the same time he or she takes classes directly pertaining to the student’s vocational field.

Question 88

The term that refers to how people interact and communicate is which of the following?

norming
group dynamics
consultation
storming

Answer 88

group dynamics

Group dynamics refers to how people interact and communicate. Group dynamics can play an important part in reaching group decisions. Group dynamics includes interactions, exchange of information, and relationships.

Question 89

A one or two-sentence statement that describes why your company exists, who it serves, your company’s goals, and your company’s philosophy is which of the following?

executive summary
synopsis
mission statement
by-laws

Answer 89

mission statement

The mission statement is a one or two-sentence statement that describes why your company exists, who it serves, your company’s goals and your company’s philosophy. Essentially, the mission statement briefly describes what your company has set out to achieve. It should be kept simple and be grounded in reality.

Question 90

If a school wants to create a curriculum by first analyzing the requirements of students, their strengths and weaknesses and not spending too much time with topics students are already familiar with, they can conduct tests before framing the curriculum. This assessment is called

Normative Assessment
Objective Assessment
Subjective Assessment
Formative Assessment

Answer 90

Formative Assessment

Formative assessment, also referred to as “educative assessment,” is used to aid learning. A common form of formative assessment is diagnostic assessment. Diagnostic assessment measures a student’s current knowledge and skills for the purpose of identifying a suitable program of learning.

Question 91

What is a walk-in interview?

An interview where all candidates are chosen for the job
An interview held for a job that involves a lot of physical labor
An interview for which a prior appointment is not needed and anyone can attend without getting their application shortlisted earlier
An interview held by a placement agency for a company

Answer 91

An interview for which a prior appointment is not needed and anyone can attend without getting their application shortlisted earlier

Normally while applying for job one has to submit the application and if the company finds the qualifications good the candidate is invited for an interview. In a walk-in interview any candidate can take the interview without the first cutoff.

Question 92

“What would you do in this situation” is which interviewing technique?

Situational.
Taxonomy.
Analytical.
Behavioral.

Answer 92

Situational

Situational techniques are also called Incident interview questions. These focus on stories and ask candidates how they would react. They are also useful for explaining expectations.

Question 93

Which of the following parts of a letter identifies the recipient of the letter?

body
complimentary close
inside address
signature block

Answer 93

inside address

The inside address identifies the recipient of the letter. It is typed one or more lines below the date, depending on how long the letter is.

Question 94

Competency-based programs in business education are based on which of the following underlying premises?

Students get evaluated with feedback from teachers as well as peers
Objectives are designed individually for each student
Objectives should direct instruction
A level of mastery has to be achieved in all competencies

Answer 94

Objectives should direct instruction

Competency based programs are based on student achievement of specific objectives outlined in the course. These objectives direct the scope and method of instruction. These programs are used in business skill building areas of instruction.

Question 95

Maintaining ethical and moral standards are very important for a business to achieve corporate governance and accountability. Which domain of Bloom’s Taxonomy would include skills that need to be developed by teachers to make students understand these concepts?

Psychomotor
Cognitive
Affective
Social

Answer 95

Affective

The Affective domain includes the manner in which we deal with things emotionally, such as values, appreciation, motivations, and attitudes. The skills here would allow the students to understand why businesses should maintain accountability and conduct their operations in an honest manner.

Question 96

A cow gives 100L of milk in a year and consumes 1200kg of fodder. At which of the following prices of milk per liter and fodder per kg is it viable to keep the cow?

$12, 80 cents
$12, $1
$14, $2
$11, $1

Answer 96

$12, 80 cents

The cost of milk produced should be greater than the cost of the fodder fed if keeping the cow is financially feasible. At $12 per liter, the cow would produce $1200 while using 1200 kg of fodder at $0.80 per kg which cost $960. This is the only case in which keeping the cow would be viable. In all other answer options, the cost for the fodder would be greater than the income from the milk production.

Question 97

All of the following can be discussed with an employer at an interview except

Potential for advancement
The shortcomings of the previous employer
Salary being offered
Strengths of the employee

Answer 97

The shortcomings of the previous employer

Usually in an interview the shortcomings of the previous employer are not a topic for discussion. If candidates are asked this question they should not start listing out all that they found lacking but instead deviate the question to why they are joining the new organization. Critiquing a previous employer in front of a new one creates a negative impact.

Question 98

When a business person is writing an email to a person for the first time all of the following would be good suggestions except for:

Include a meaningful subject line.
Use capital letters to emphasize salient points.
Open with a formal salutation.
Use clear concise paragraphs.

Answer 98

Use capital letters to emphasize salient points.

This would not be a good suggestion. The writer should use standard spelling, punctuation, and capitalization. There is nothing worse than an email that “screams” a message in capital letters.

Question 99

If loans are available for lesser rates of interest, how does it affect saving?

Saving comes down
There is no relation between saving and the rate of interest of loans
Banks force people to save more.
Saving remains constant

Answer 99

Saving comes down

As the rate of interest of loans comes down, banks offer lower rates of interest on deposits which reduces saving. Banks cannot force people to save more, it depends only on how much the people are being given in terms of interest for their savings.

Question 100

For entry level employees or beginners, which of the following resume formats would be most appropriate?

Historical
Beginner
Chronological
Job-Centric

Answer 100

Chronological

Resumes are usually classified as chronological and functional based on their order and things highlighted. The chronological focuses on time frames and where work was done and is the one appropriate for beginners, entry level jobs.

Question 101

Which of the following is an example of an informal research method?

Informal survey.
Scientific experiment.
Search primary information.
Encyclopedia

Answer 101

Informal survey Papers and reports need to be carefully researched. This can include formal and informal research. An informal survey is informal research. The other answers are sources for formal research.

Question 102

For a deposit of $200 a bank gives an extra payment of $8 in a year. What is the nominal rate of interest?

4%
8%
2%
6%

Answer 102

4%

The nominal rate of interest is the amount that the bank gives in terms of an extra percentage for deposits. Here for $200 the bank gives $8, so the nominal percentage rate is 8/200=4%.

Question 103

Which of the following would NOT be appropriate in writing a business communication with a positive message?

Answer questions in the order they were asked.
Do not include any details.
Embed negative information in a positive context.
Make sure the receiver understands what to do next.

Answer 103

Do not include any details.

To be sure that the receiver of the message is not left with confusion or doubt, details are necessary. The middle section of the communication should contain the details.

Question 104

Words in reports need to be ____.

Bias.
Unfamiliar.
Complex.
Plain.

Answer 104

Plain Words in reports should be plain and familiar. Long, unfamiliar words will create confusion and lose interest. Terminology is appropriate if used in the correct context.

Question 105

If you are writing a letter of request, which of the following steps would NOT be part of the process?

direct statement of the request
justification for the request
demand for specific action on the request
details of the request

Answer 105

demand for specific action on the request

The process of writing a letter of request should include: a direct statement of the request; justification, explanation and details of the request; but not a demand for action. The closing should be courteous with request for the specific action you desire.

Question 106

Which of the following sentences is punctuated correctly?

He worked all night therefore he was able to finish the report in time.
He worked all night, therefore, he was able to finish the report in time.
He worked all night; therefore, he was able to finish the report in time.
He worked all night, therefore he was able to finish the report, in time.

Answer 106

He worked all night; therefore, he was able to finish the report in time.

A has no punctuation between night and therefore. They are two separate ideas and need to be kept apart. Option D has an unnecessary comma after report. Semicolons can sometimes occupy the same space as periods, as long as (1) the ideas they separate are closely related and (2) the joined ideas sound good when read together as a single sentence.

Question 107

Which of the following guidelines for email communication is not appropriate?

Put the key message in the subject line.
Keep the email short.
Try to put all pertinent information on the first screen page.
Cover all topics to be discussed in one email.

Answer 107

Cover all topics to be discussed in one email.

C A person should cover only one topic per e-mail. Other guidelines include editing and spell-checking the email, and adding the address as the last step before sending to reduce the chance of sending an unfinished email.

Question 108

Which type of resume is useful when attempting to change industries?

Functional.
Combination.
Chronological.
Targeted.

Answer 108

Functional Functional resumes focus on the skills that individuals develop. These are the most useful types of resumes for applicants attempting to choose jobs in a new industry.

Question 109

Which of the following would not be the work of a secretary?

Minute taking
Composing letters
Creating the budget of the organization
Making travel bookings

Answer 109

Creating the budget of the organization

A secretary is appointed to assist a person who is short of time and would like to delegate the tasks of lesser importance. A secretary would not be required to do a task as important as creating a budget of an organization.

Question 110

If, in taking notes in a meeting, you write down a key word or phrase and as the meeting moves on you make branches from this central phrase, you are using which of the following devices?

linear notes
speedwriting
graphic notes
mind mapping

Answer 110

mind mapping

This technique is called the Mind Map. As you make notes each branch has sub-branches. Different branches may link to one another. It is a visual method that makes the meeting notes easier to recall.

Question 111

While buying new supplies for a classroom, which of the following should be the least important factor to be taken into account?

The warranty and service period provided by the manufacturer
The instructor is comfortable using the new supplies
The supplies are required to satisfy the needs of the curriculum
The supplies do not pose any chance of accidental injury

Answer 111

The instructor is comfortable using the new supplies

As curriculum changes it becomes important to buy new supplies and use them to train students. The supplies should be safe and not pose any accidental injury. As far as the instructors are concerned, they have to learn to use the new supplies too as it is in the benefit of the students.

Question 112

In which of the following management styles does management assume that employees are members of the team, willing to do their share to accomplish the organization’s goals?

directive style
coaching style
supportive style
delegating style

Answer 112

coaching style

In the coaching style of management top executives provide direction and tell lower-level employees what to do. However, management assumes that employees are members of the team, willing to do their share to accomplish the organization’s goals. Management explains the rationale for decisions and listens to ideas and suggestions from below.

Question 113

A customer finds that his credit card company did not inform him about the APR and annual fee due to which he has run up a huge bill. Which of the following acts protects him?

Consumer Protection Act
Fair Lending Practices Act
Fair Debt Collection Practices Act
Fair Credit and Charge Card Disclosure Act

Answer 113

Fair Credit and Charge Card Disclosure Act

The Fair Credit and Charge Card Disclosure Act requires new disclosures on credit and charge cards, whether issued by financial institutions, retail stores or private companies. Information such as APRs, annual fees and grace periods must be provided in tabular form along with applications and pre-approved solicitations for cards.

Question 114

The United States Postal Service uses the two letter code of CT for letters when they are sent where?

Canada
Returned to the sender if undelivered
Connecticut
Cincinnati

Answer 114

Connecticut

The United States Postal Service has a two letter code for all the U.S. states. Connecticut has the code of CT.

Question 115

If a reader of a report is likely to agree with the content of the report, the material should be presented in which of the following ways?

in indirect order
in direct order
as necessary information
as unauthorized information

Answer 115

in direct order

When the reader is likely to agree with the content of the report, the material is presented in direct order, starting with the main idea. If the reader may have reservations about the report, the material is presented in indirect order, starting with the details and leading up to the main idea.

Question 116

Which type of interview asks questions about the specific actions of past performance?

Situational.
Taxonomy.
Analytical.
Behavioral.

Answer 116

Behavioral Behavioral interviews incorporate past performance in questions. It also helps explore job expectations.

Question 117

When a business communication begins with the main idea followed by supporting details this is which of the following?

neutral sequence
conflicting sequence
inductive sequence
deductive sequence

Answer 117

deductive sequence

Deductive sequencing starts with the main idea followed by supporting details. Inductive sequencing starts with the details and ends up with the main idea.

Question 118

If the employer has asked a question that is illegal to ask, what should the candidate’s response be?

Answer the question
Give a reply that the interviewer seems to want to hear.
End the interview abruptly and later sue the company for discrimination
Say that it is not something that should be discussed here

Answer 118

Say that it is not something that should be discussed here

A polite way to refuse to answer the question would be to say that it is not something that should be discussed and does not make any effect on the performance of the person. Then tell the interviewer to move ahead.

Question 119

The federal government taxes corporations. In terms of this taxation, which of the following is a tax in which the rate remains unchanged as the tax base increases?

proportionate tax
regressive tax
progressive tax
marginal tax

Answer 119

proportionate tax

A proportionate tax is a tax in which the rate remains unchanged as the tax base increases. An example of a proportional tax is property tax.