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Economics > Economics > Flashcards

Economics Flashcards

1
Q

Which part of the organizing process aids in effective and efficient progress toward planned goals and often results in changes within the organization?

A

Evaluating Results

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2
Q

What is the result of a company increasing the delegation of authority and the span of control?

A

Increased decision-making authority given to employees

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3
Q

Which two key elements does an effective organization include? Choose 2 answers

A

Human interaction and structure

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4
Q

Why does a line organizational structure function most effectively in a crisis situation?

A

It establishs a direct flow of authority

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5
Q

Why would management insert control mechanisms into its organizational structure?

A

To assess the success of the planning function

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6
Q

Which primary driver does management use for an organization’s structure?

A

Achievement of company goals

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7
Q

Which step in the organizing process results in management grouping work activities into units within the organization?

A

Departmentalization

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8
Q

A high-tech startup company is launching a marketing campaign for its new social media portal by highlighting how the portal exceeds the connectivity and collaboration capabilities of all other social media sites.Which type of competitive advantage is this company leveraging?

A

Product

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9
Q

Which marketing strategy is devoted to maintaining continuous bottom line prices rather than relying on short-term price-cutting tactics such as cents-off coupons, rebates, and special sales?

A

Every day low pricing

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10
Q

When would a pull promotional strategy enhance a competitive advantage to market a product better than a push strategy?

A

when demand for the product is driven by the end user

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11
Q

Which marketing tool is often used to build effective relationship marketing
campaigns?

A

Affinity programs

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12
Q

Which element of the promotional mix has the advantage of messaging that can be tailored for each customer, but the disadvantage of a high cost per contact?

A

Personal setting

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13
Q

What three factors should be addressed in a successful marketing plan? Choose 3 answers

A

Target market, sales revenue goals, plan implementation timeline

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14
Q

Which three characteristics are measured in demographic segmentation? Choose 3 answers

A

Race and ethnicity, income, household size

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15
Q

Which three tasks are key responsibilities of operations managers? Choose 3 answers

A

Planning the overall production process
Determining the best layout for the production process
Implementing the production plan

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16
Q

Which two characteristics does a Just-In-Time (JIT) System have?Choose 2
answers

A

Production using JIT reduces a firms inventory costs

A JIT system seeks to eliminate anything that does not add value in operations activities

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17
Q

Which aspect of operations management do the ISO 9000 standards address?

A

Establishment of effective quality systems

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18
Q

Which manufacturing model uses technology to produce small runs of customized products cost effectively?

A

Flexible

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19
Q

Which two of the following distribution channels would take title of the products they handle? Choose 2 answers

A

Limited-function merchant wholesaler
Full-function merchant wholesaler

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20
Q

Which economic graph is used by organizations to regulate production by predicting the amount of product buyers will purchase at different prices?

A

Demand curve

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21
Q

Which two factors drive demand in a microeconomic system? Choose 2 answers

A

Price of substitute goods and customer preference

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22
Q

How does a sudden shortage of a commodity product affect the immediate demand for the product at its current price?

A

Demand increases

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23
Q

Which two impacts result from a nation’s increase in productivity? Choose 2 answers

A

Economy expands and personal wealth increased

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24
Q

For which two purposes will the U.S.
Federal Reserve System follow an expansionary monetary policy? Choose 2 answers

A

To encourage bankers to make loans

To cut the cost of borrowing

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25
Q

Which two economic impacts should a manager anticipate when the U.S. government reduces the number of Treasury bills, Treasury Notes, and Treasury bonds it sells? Choose 2 answers

A

A rise of interest rates on these securities

An increase in overall cost of debt to private borrowers

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26
Q

What is one role of a financial manager?

A

Analyzing major investment decisions

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27
Q

Which two activities are finance activities rather than accounting activities?Choose
2 answers

A

Making capital market investments
Creating a financial plan

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28
Q

Which three sources should a business consider when seeking a long-term funding source? Choose 3 answers

A

Venture capital, public sales of stocks, hedge funds

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29
Q

In which type of security should a business invest its excess cash in anticipation of paying off the current year’s tax liability?

A

Commercial paper

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30
Q

Which role does the underwriter play in financing business operations when using the capital market to sell securities to the public?

A

It assumes the risk of the assessed value of the security from the issuer.

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31
Q

Why should a manager use financial controls in a firm’s financial plan?

A

To determine the accuracy of forecasted revenues, costs, and expenses

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32
Q

What does a CFO use in financial planning to determine the expected level of revenue for future periods?

A

Sales forecast plus non-sales revenue

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33
Q

What are two powers of the U.S. Securities and Exchange Commission (SEC) that impact the conduct of a firm’s U.S. business operations? Choose 2 answers

A

Protecting investors in public securities transactions

Pursuing civil actions against businesses for securities law violations

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34
Q

An investor is concerned that the U.S. government may apply increased regulatory action on banks; in particular, that the reserve rate for bank deposits may rise and that this rise will hurt bank profitability. Which federal agency implements this regulation?

A

Federal reserve system

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35
Q

Which two risks does a firm face by funding the purchase of long-term assets with short-term funding sources? Choose
2 answers

A

Volatility of interest rates and frequent renewal rates

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36
Q

Which funding source should a firm use if it wishes to secure long-term financing while retaining all of its equity?

A

Long term commercial bank loan

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37
Q

Which three characteristics make commercial paper a low-risk, attractive source of short-term funding for a business? Choose 3 answers

A

It can make large amounts of money available
It carries interest rates that are 1 to 2 percent less than bank loans
It has a maturity that ranges between 1 and 270 days

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38
Q

Which funding option would a business seek in order to cover one month’s operations costs?

A

Opening a line of credit

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39
Q

Why should companies that are conservative investors with liquidity concerns invest their excess cash in money market funds?

A

It converts easily into cash

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40
Q

Which financial statement should an investor examine to identify the liabilities
of a firm?

A

The balance sheet

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41
Q

A company wishes to determine if it should fund a project with bonds or equity.Which business concept would it most likely use to assist in the decision?

A

Leverage

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42
Q

Which calculation determines a firm’s return on equity?

A

Net income divided by average equity

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43
Q

Why should a multinational business use
International Financial Reporting
Standards (IFRS)?

A

To provide a more accurate picture of the real value of the fixed assets

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44
Q

Which users of financial statements use the financial statements to evaluate operations of the firm and to make investment decisions?

A

Owners and creditors

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45
Q

What is considered the heart of any information system?

A

The database

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46
Q

Which type of information system should be accessed by the vice president of sales for a national department store chain who wants to see the previous day’s sales receipts?

A

A transaction processing system

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47
Q

A company wants to restrict remote access to intellectual property while promoting productivity through
convenient remote access to common
business applications.Which type of cloud service deployment model should this company use?

A

Hybrid

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48
Q

Which activity raises ethical issues heightened by the capabilities of data mining?

A

Selling customer data for external marketing research

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49
Q

How should a business protect the privacy and confidentiality of customer data?

A

Enact data system security standards

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50
Q

Which intent of spyware creates a company security issue?

A

The intent to report on a users internet activity

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51
Q

During the organizing process, when do managers assign activities to employees and allocate required resources?

A

After grouping work activities and tasks into a logical structure

52
Q

A garment manufacturer has different departments for pattern making, cutting, stitching, and finishing.
Which type of departmentalization has this company used to divide work activities?

A

Process departmentalization

53
Q

Which level of management focuses on long-term planning in an organization?

A

Top management

54
Q

Which organizational structure utilizes a project management design?

A

Matrix organization

55
Q

What should managers do to create an effective organizational structure?

A

Establish clear expectations for employees

56
Q

A grocery chain authorizes its store managers to hire staff, organize promotional events, and make decisions such as issuing store credit and processing refunds to prevent the escalation of complaints. It also ensures that its sales staff is well equipped to address most customer queries without deferring to the store manager.
Which characteristic does the grocery chain emphasize in its organizational structure in this scenario?

A

Decentralization

57
Q

Which managerial skill helps managers view their organization as a unified whole?

A

Conceptual

58
Q

A production manager of a toy manufacturing company is determining the most cost-effective order of the work processes to assemble a new toy.
Which managerial task of production control is the manager focusing on in the given scenario?

A

Routing

59
Q

An auto parts manufacturer follows a quality control methodology that aims to reduce the wastage of material, resources, and time. This methodology focuses on improving business processes and has five phases: defining, measuring, analyzing, improving, and controlling. The goal is to achieve defect-free products 99.9997% of the time.
Which quality control methodology does the manufacturer use in the given scenario?

A

Six sigma

60
Q

An architect uses a software program to draw the complete blueprint of buildings. In case of client feedback, the program allows for quick modifications and updates, which helps the architect work more efficiently and flexibly.
Which type of technology is the architect using in this scenario?

A

Computer-aided design

61
Q

When is it favorable and efficient to have a direct distribution channel?

A

When the target market is concentrated in one geographical area

62
Q

The design department at a furniture manufacturing company has come up with an idea to manufacture a foldable staircase that can be installed in small apartments to save space. The production manager is now detailing the product specifications and deciding the machinery required to manufacture the item.
Which production management task is the manager performing in the given scenario?

A

Planning the production process

63
Q

A newly launched organic foods company prices its products much lower than similar products of other brands.
Which pricing strategy is the company using in this scenario to gain a competitive advantage?

A

Penetration pricing

64
Q

A company is launching a range of shampoos made with natural herbs and claims that they reduce hair loss and reverse hair damage. The company’s advertising campaign focuses on highlighting potential hair damage caused by the chemical-based shampoos of competing brands.
Which type of advertising is exemplified in this scenario?

A

Comparative advertising

65
Q

A local grocery store and a restaurant team up to organize a food festival to bring the community together. During the festival, they also run a donation drive to benefit local food banks.
Which type of marketing is exemplified in this scenario?

A

Relationship marketing

66
Q

What helps a manager understand socioeconomic and political factors beyond the manager’s control when developing a marketing strategy?

A

Environmental scanning

67
Q

A chocolate manufacturer decides to switch to environment-friendly packaging for all its chocolates to appeal to environmentally conscious consumers.
Which element of the marketing mix is the manufacturer focusing on in this scenario?

A

Product

68
Q

Which type of analysis helps marketers analyze and create consumer behavior profiles to forecast future behaviors of the consumers?

A

Predictive analysis

69
Q

What is primary data in marketing research?

A

Data collected directly from the source

70
Q

Jaunty Coffee Co. is a chain of popular coffee outlets. The company sells coffee at higher prices compared to its rivals. However, customers are willing to pay the premium because they perceive the coffee to be of high quality. Regular customers will often walk past several other coffee outlets every morning to reach a Jaunty Coffee outlet.
Which type of competitive advantage does the given scenario exemplify?

A

Brand equity

71
Q

What is a variable for the end-use market segmentation method in business-to-business (B2B) markets?

A

Product design specifications for performance

72
Q

In which three ways does business-buying behavior differ from customer-buying behavior? Choose 3 answers

A

A group or committee often makes decisions
Purchasers often invite selected providers to bid on a purchase
Buyers face organizational influences that affect their own preferences

73
Q

Which three factors suggest a product should be marketed as a specialty product?

A

Priced high, purchased infrequently, available from a small number of retail outlets

74
Q

With which two types of products does a marketing strategy rely on advertising more than personal selling? Choose 2 answers

A

Accessories to primary products
Consumable supplies

75
Q

after years of marketing a body lotion, a cosmetics company begins promoting the lotion as an insect repellent as well. In which three product life cycle extension strategies did this company engage?

A

adding new users, in increasing frequency of use, finding new uses for the product

76
Q

what are three qualities of strong brand equity? Choose 3 answers

A

Awareness, loyalty, favorable images

77
Q

A customer intends to purchase her favorite cereal. It is out of stock, so she purchases and alternative brand of cereal instead. Which stage of brand loyalty is this customer in?

A

Brand preference

78
Q

Which manufacturer distribution model is enhanced by the shipping and tracking capabilities of a global package delivery service

A

Direct

79
Q

What are capital items

A

Items that are relatively expensive and long lived

80
Q

At which stage of the product lifecycle does competition intensify

A

Maturity

81
Q

What is the process of linking favorable images to a specific brand called?

A

Brand association

82
Q

Which term describes an instance of a consumer associating a specific brand with a certain product category in their mind

A

Brand awareness

83
Q

which entity in a distribution channel creates market, utility by ensuring that goods are available to people when they want to purchase them

A

Retailers

84
Q

What is odd pricing in the context of consumer perception of prices?

A

Pricing using uneven amounts

85
Q

When a person uses an airline reservation system to book flight tickets, the system records and completes the sale of the ticket. Which operational support system does this scenario exemplify

A

Transaction processing system

86
Q

What is a difference between operational support systems OSS and management support systems MSS

A

OSS provide information about work activities, whereas MSS aid managers in decision-making

87
Q

What is an advantage of pulling computing resources in cloud computing?

A

Flexibility to adapt to fluctuating demand

88
Q

A manufacturing company uses sensors to track the wear and tear of various machines in its factories. The sensors send data about different metrics, such as temperature and vibration, to a computer program, allowing the production manager to anticipate potential breakdowns. This helps the manager plan, scheduled maintenance and reduce downtime. Which technology is exemplified in this scenario?

A

Internet of things

89
Q

an organization uses key cards to monitor employee attendance. The card also reports the employees location during the day to a software system, which allows the employer to see where the employees are at any time. To protect client, data and confidentiality, employees have restricted access to some data and are barred from opening personal emails. Which action of the company in the given scenario is ethically objectionable?

A

Tracking the movement of employees

90
Q

The servers of a cloud computing company that caters to companies all over the world crash when a group of attackers floods them with too many requests. The attack results and distribution of work, and the company occurs heavy monetary losses. Which type of security threat is described in the scenario?

A

Denial of service

91
Q

A politically motivated group deploys Ransom to block access to a commercial bank. The group also steals sensitive personal and financial data of the banks, clients and threatens to make it public unless the bank agrees to pay a ransom. Which type of security thread is described in the scenario?

A

cyberterrorism

92
Q

What is an example of a micro economic decision?

A

Using public transportation to commute to work

93
Q

In the context of micro economic factors, when does accompany experience a leftward shift in a product demand curve

A

When the price of a complementary product increases

94
Q

In the context of the micro economic factors, what causes a right word shift in the supply curve of accompanies product

A

An increase in government subsidies

95
Q

Why does the government implement expansionary monetary policies?

A

To reduce the cost of borrowing funds

96
Q

what is the overall impact of recession on businesses?

A

Decrease in production

97
Q

According to the law of supply and demand, what is a result of the shortage of a product

A

The price of the product rises to become the equilibrium price

98
Q

in a fiscal year, a country produces goods worth $6 billion and services worth $4 billion. In the same year at the annual income of people of the country is $11 billion and that of businesses is $34 billion. What is the gross domestic product GDP of the country in that fiscal year?

A

$10 billion. The sum of goods and services produced within a country in a year is the countries GDP.

99
Q

The government body of a country, which is debating the merit of different approaches on taxation, decides to implement tax cuts to help increase the disposable income of people and improve the general standards of living. This is expected to increase the overall spending and give them much-needed boost to the market and the economy. Which type of policy is the government body discussing in the scenario?

A

Fiscal policy

100
Q

What is the difference between microeconomics and macroeconomics?

A

Micro economics is associated with the economy of families and businesses, whereas macro economics is associated with a countries economy.

101
Q

A companies board of directors wants to know the details of the buildings, equipment, supplies, accounts receivable, and marketable securities. The company owns. The board also wants to know the details of the account payable and long-term debt. Which report should the financial manager look at to obtain the required information?

A

The balance sheet

102
Q

A company showing increasing revenues is not showing a corresponding increase in profits. The companies chief executive officer CEO wants to determine whether there is an unexpected increase in cost that needs to be controlled. Which financial report should the CEO look at to obtain the required information?

A

The income statement

103
Q

Which question does the current ratio answer about a company?

A

Will the company be able to meet short term obligations?

104
Q

what do assets represent in business from a financial perspective?

A

Funds usage

105
Q

How do international financial reporting standards IFRS help global trade?

A

By allowing comparability of the business results

106
Q

What is an indication that a business is heading towards financial trouble

A

Low cash flow

107
Q

What is a task of a financial manager in a typical company?

A

Optimizing risk versus return

108
Q

What is the major difference between financial managers and accountants?

A

Financial managers find and allocate money, whereas accountants measure and interpret financial information

109
Q

Which source of structure allows a company to benefit from leverage

A

Long-term debts

110
Q

What is an indirect way of fun transfer from savers to users that businesses used to obtain funds from financial markets

A

Obtaining a bank loan

111
Q

A company with a good reputation in the financial market wants to raise funds for expansion. For this the company issues bonds that are not backed by any collateral. Which type of bond has the company issued in this scenario?

A

Debenture

112
Q

A privately owned cloud storage company has issued securities in the primary market to acquire the capital for funding the development and launch of a new product. Which type of securities has the company issued to raise funds from the financial market in the given scenario?

A

Initial public offering IPO

113
Q

A manufacturer needs cash to meet at short term liabilities. Theresa funds, it issues securities that will mature in six months. Which financial market instrument does the manufacturer use to raise funds in the scenario?

A

Commercial paper

114
Q

A logistics company plans to increase its trucking fleet by 30% in the next three years. The financial manager must create a financial plan for this duration. What are the three questions the financial manager must find answers to before developing the financial plan?

A

What funds will be needed, when will they be needed, and where will the money come from?

115
Q

A sporting goods manufacturing company is expanding its production capacity by 15% keep up with the growing demand. The chief executive officer CEO has asked the chief financial officer CFO to make the financial plan for the expansion. What is the first thing the CFO needs to do to prepare the financial plan.

A

Create a forecast of sales and revenue

116
Q

How does the federal reserve system fed Increase the amount of money banks have to lend to businesses?

A

By reducing the percentage of deposits, the banks must hold onto at any point

117
Q

What happens to the growth rate of the money supply when the federal reserve system fed sells foreign currencies

A

It slows down

118
Q

In the context of available short term funding options, what is an advantage of trade credit for retailers?

A

Easy availability

119
Q

A paper manufacturer sells paper worth $50,000 on 30 day credit to a publishing company. However, instead of waiting 30 days, the manufacturer sells the accounts receivable note to the bank for 47,000 to acquire the cash immediately. Which type of funding is exemplified in the given scenario?

A

Factoring

120
Q

What is an advantage of commercial paper as a short term funding option?

A

It does not have to be registered with the securities and exchange commission if it’s maturity is less than 270 days.

121
Q

A company wants to modernize its factories and plants to obtain long-term financing by selling bonds. What is a disadvantage for the company in the scenario?

A

An obligation to pay interest regularly

122
Q

To raise funds, a companies’s owner is thinking about getting a long-term loan from a commercial bank. The company already has significant bank loans. Which factor must the owner consider before borrowing more from the bank?

A

Fixed cost will increase

123
Q

Companies financial manager has an opportunity to raise funds using private placement. They weigh all possible pros and cons before presenting the option to the companies chief executive officer. Which risk associated with private placement should the financial manager consider before making the recommendation?

A

High interest rates

124
Q

After conducting an analysis, a companies financial manager recommends selling common stock as the best alternative to raise long-term funding for the companies operative expenses. Which impact associated with the recommendation should the financial manager communicate to the board of directors?

A

Shareholder control will be diluted

125
Q

The company wants to obtain long-term financing for implementing expansion plans. However, the Board of Directors wants to raise funds without reducing the voting power of the current shareholders. Which funding option should the company opted for in the scenario?

A

Commercial bank loan

Economics (4 decks)

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