Final Exam - Unit 3 and 4

Question 1

What does a business letter do?

Answer 1

A business letter provides information to make a deal, conversation, or negotiation.

Question 2

List the required parts on a business letter and where each required part is located.

Answer 2

1) Letterhead in the top left corner.
2) Date 2 spaces below.
3) Inside address 3 spaces below.
4) Salutation and subject line.
5) Main paragraph.
6) Closing, space for signature.
7) Name and title.

Question 3

How many spaces are required for a signature on a business letter?

Answer 3

4 - 6

Question 4

What is a salutation and subject line?

Answer 4

1) Salutation - A greeting used to address an individual.
2) Subject line - A brief preview or headline for the contents of the email.

Question 5

What is a complimentary closing?

Answer 5

Words such as “sincerely” that comes before the signature, to express the senders regard for the receiver.

Question 6

What is information technology?

Answer 6

Information technology is the study or use of systems for storing, sending, and retrieving information.

Question 7

What is software and hardware?

Answer 7

1) Software - Anything that you can’t physically touch within a computer. (Apps, codes, and programs)
2) Hardware - Anything that you can physically touch within a computer. (Mouse, keyboard, and screen.)

Question 8

What are operating systems?

Answer 8

Manages the computers processes along with its software and hardware. Allows us to communicate with the computer without knowing it’s language.

Question 9

What is business directory?

Answer 9

Business directory is an online list of businesses within a specific niche, location, or category.

Question 10

What is Internet Service Provider and URL?

Answer 10

1) Internet Service Prover - A company that providers internet access to anyone. (Telus and Freedom)
2) URL - The address of a World Wide Web page. (https://www…)

Question 11

What is the difference between coins and banknotes?

Answer 11

1) Banknotes - Are issued by the government of Canada as paper money.
2) Coins - Are minted at the Royal Canadian Mint in Ottawa or Winnipeg.

Question 12

List 3 different ways you can tell a banknote is counterfeit.

Answer 12

1) Feel the smooth polymer texture.
2) Look for transparency through the large window of a metallic portrait and building.
3) Feel the raised ink on the “Bank of Canada” and shoulders.

Question 13

What are the 4 functions of money?

Answer 13

1) Medium of exchange - When people exchange money for goods and services.
2) Standard of value - To determine how much goods and services are worth.
3) Store of value - Can be stored or saved for future use.
4) Standard of future payment - Allows customers to determine the future value of a transaction.

Question 14

What is the difference between gross, disposable, and discretionary income?

Answer 14

1) Gross Income - The total amount of money earned before any deductions.
2) Disposable Income - The amount of money left after deductions of income tax, CPP, and El.
3) Discretionary Income - The amount of money left after deductions of income tax, and essential expenses.

Question 15

What are the 5 key factors that influence consumers to buy and explain them?

Answer 15

1) Income and Price - Family obligations like children and income affect what we buy.
2) Status - Some people feel that having certain products makes them better than others.
3) Current trends - Some people heavily rely on trends when purchasing an item.
4) Customs and habits - Customs like family, religon, and community affect what we buy.
5) Promotion - Advertising and promotion increases consumers’s desires.

Question 16

What are 3 types of business incomes?

Answer 16

1) Revenue - The total amount of money a business makes from selling goods and services.
2) Gross Income - The total amount of money received by the business minus the cost of goods sold.
3) Net Income - Is the gross income minus the business expenses.

Question 17

What are the 3 steps to calculate a personal budget?

Answer 17

1) Step 1 - Calculate and add up the amount of incomes you expect to earn or receive.
2) Step 2 - Determine and calculate the 2 types of expenses.
3) Step 3 - Calculate the amount of money left over.

Question 18

What is the difference between fixed and variable expenses?

Answer 18

1) Fixed Expenses - Occur on regular basis and usually cannot be adjusted. Like phone bills or savings.
2) Variable Expenses - Expenses that differ from month to month, like food and clothing.

Question 19

What are banks and how do they make money?

Answer 19

Banks and businesses that sell services to earn a profit. They make a revenue by gaining interest on loaned money and investments.

Question 20

Who runs The Bank of Canada and what is its purpose?

Answer 20

The Bank of Canada is operated by the federal government and they help to keep the economy stable by regulating the money supply.

Question 21

What are credit cards?

Answer 21

Credit cards is a loaned concept of money that you have to pay off or 20 - 25% of interest will be charged.

Question 22

What are investments?

Answer 22

Investments are a way to use money with the hopes to make more money.

Question 23

What are savings accounts, term deposits, and GIC?

Answer 23

1) Savings accounts - Earn interest but a very small amount.
2) Term deposit - Locks away money for a certain time period but has guaranteed interest.
3) Guaranteed Investment Certificate - Same as term deposit but time is longer.

Question 24

What are bonds and mutual funds?

Answer 24

1) Bonds - Issued by the government and corporations for when they want to raise more money.
2) Mutual funds - When money is collected from various investors to invest in different assets.

Question 25

What is a divedend?

Answer 25

Dividend is when a company gives a portion of its earnings back to shareholders.

Question 26

What is diversification?

Answer 26

Diversification is when you spread your money over a wide variety of investments to reduce risk.

Question 27

What is credit used for?

Answer 27

• Credit is when you use someone else’s money to buy an item or service and then pay for it later.
• Credit is used to avoid draining savings or to start a new business.

Question 28

What is consumer and business credit?

Answer 28

1) Consumer credit - Used for personal items. Like a house, car, or concert tickets.
2) Business credit - Long term credit used to buy land, equipment and buildings, and short term credit to buy raw materials, goods, and supplies.

Question 29

List some advantages and disadvantages of credit.

Answer 29

Advantages - Instant employment, convenience, emergencies, and budgeting.
Disadvantages - Credit cost, impulse buying, and over buying.

Question 30

List and explain the 3 C’s on how a creditor decides if an individual is credit worthy.

Answer 30

1) Character - Borrower’s willingness, reliability, and trustworthiness to make loan repayments.
2) Capacity - Borrower’s ability to make loan repayments on time.
3) Capital - The value of the borrower’s assets that could be used to repay debt.

Question 31

What are some examples of good and bad credit rating?

Answer 31

Good credit rating:
- Pays off all bills on time.
- Has no outstanding balance.
- Keeps debts at a reasonable level.

Bad credit rating:
- Does not pay bills on time.
- Has filed bankruptcy.
- Has too many credit cards.

Question 32

What is a sole proprietorship?

Answer 32

• 1 owner
• Advantages = Own boss, easy to start and end, and profits to the owner.
• Disadvantages = Unlimited liability, financing difficulties, and owner may not be an expert.

Question 33

What is a partnership?

Answer 33

• 2 or more owners.
• Advantages = More capital/financing, and shared responsibilities.
• Disadvantages = Unlimited liability in partnerships and agreements.

Question 34

What is a corporation?

Answer 34

• Has many shareholders, each member has one vote, and a board of directors.
• Advantages = Limited liability and transfer of ownership is simple.
• Disadvantages = Costly set up and not a lot of influence.

Question 35

What is a franchise?

Answer 35

• Hybrid
• Advantages = Brand recognition and shared marketing and training support.
• Disadvantages = Franchise and monthly fee.

Question 36

What is an Entrepreneur?

Answer 36

An entrepreneur is someone who organizes and operates a business, taking on greater than normal financial risks in hopes to make a profit.

Question 37

List and explain 3 characteristics of a successful entrepreneur.

Answer 37

1) Problem solving - Entrepreneurs often face challenges and being able to solve them is crucial.
2) Communication - Entrepreneurs must be able to talk to employees and clients to make sure they understand.
2) Planning - Entrepreneurs must plan head and decide what steps should be taken in order to grow their business.

Question 38

What is inventions and innovations?

Answer 38

1) Invention - A product or process that does something that has never been done before. (Wheel, paper, and airplane.)
2) Innovation - Using tech or new materials to improve existing products. (Cell phones, tvs, and soaps.)

Question 39

What are some ways to innovate?

Answer 39

• How the product is used.
• The packaging and design.
• The marketing strategy.

Question 40

What are patents?

Answer 40

Patents are legal rights of ownership for their invention or innovation.

Question 41

What is copyright?

Answer 41

Copyright is exclusive rights to produce sell or publish original works of art.

Question 42

What is licsensing and franchising agreement?

Answer 42

1) Licsensing agreement - Allows a business to use an invention or innovation for a fee or royalty.
2) Franchising agreement - A business licsenses its name and procedures.