Model Business Corporation Act
Subject: Business / General Business
Question 2 (1 point)
Which of the following items is found in the Model Business Corporation Act issued by the American Bar Association?
Question 2 options:
A) Information about salaries of employees in a corporation
B) Guidelines for hiring new employees in a corporation
C) Information about the personal assets of a corporation’s stockholders
D) Provisions for promoting an employee within a corporation
E) Provisions for the regulation of internal corporate affairs
Question 3 (1 point)
_____ is an element of the management activity in a business.
Question 3 options:
C) Sales promotion
D) Personal selling
Question 4 (1 point)
Catalina owns a small restaurant and is solely responsible for its debts and liabilities. She is also entitled to all the profits the restaurant makes after paying off taxes and other expenses. Her business is an example of a(n):
Question 4 options:
A) joint venture.
Question 5 (1 point)
_____ is defined as the activities that individuals, groups, and organizations undertake to protect their rights as customers.
Question 5 options:
B) Civil rights
D) Conspicuous consumption
Question 6 (1 point)
Norton is a human resource manager at a large multinational company. After a drastic drop in revenue, his company thinks of ways to correct the situation. At a meeting with the top management, the CEO suggested that the company should reduce its workforce by 20 percent. This move would help the company cut costs and continue functioning on the current projects. In this scenario, which of the following strategies is Norton’s company planning to use?
Question 6 options:
A) Off shoring
C) Crowd sourcing
Question 7 (1 point)
_____ are often the Small Business Administration’s principal means of providing direct management assistance to small businesses and entrepreneurs.
Question 7 options:
A) Local Chambers of Commerce
B) Small Business Development Centers
C) Service Corps of Retired Executives
D) Small Business Institutes
E) Active Corps of Executives
Question 8 (1 point)
Which of the following is an international trade alliance between 21 nations that promotes open trade and economic and technical cooperation among its member nations?
Question 8 options:
A) General Agreement on Tariffs and Trade (GATT)
B) Asia-Pacific Economic Cooperation (APEC)
C) North American Free Trade Agreement (NAFTA)
D) European Union (EU)
E) Association of Southeast Asian Nations (ASEAN)
Question 9 (1 point)
Which of the following organizations funds programs to train the hard-core unemployed so that they can find jobs and support themselves?
Question 9 options:
A) Transparency International
B) Boston Consulting Group
C) National Alliance of Businessmen
D) National Business Ethics Organization
E) British Financial Services
Question 10 (1 point)
Which of the following is a reason behind the failure of small businesses?
Question 10 options:
C) Managerial experience
D) Poor business concept
E) High costs of start-up
Question 11 (1 point)
In the context of corporations, what is a white knight?
Question 11 options:
A) A more acceptable firm that is willing to acquire the firm threatened by a hostile takeover
B) An attempt to fend off a hostile takeover by selling stock at prices below the market value
C) An attempt to fend off a hostile takeover by requiring the deal to be approved by a majority of shareholders
D) An attempt to fend off a hostile takeover by raising capital through an initial public offering
E) A group of investors who have borrowed money to acquire a firm
Question 12 (1 point)
In the process of starting a business, the step that immediately succeeds the development of a business plan involves:
Question 12 options:
A) organizing resources like labor and supplies.
B) developing some general business ideas.
C) deciding an appropriate legal form of business ownership.
D) promoting the business to the customers.
E) filing for tax returns for the business with the Internal Revenue Service.
Question 13 (1 point)
The American economic system is best described as _____ because the government regulates business to preserve competition and protect consumers and employees.
Question 13 options:
A) scientific socialism
B) pure communism
C) mixed Marxism
D) modified capitalism
E) pure capitalism
Question 14 (1 point)
Which of the following is an advantage for small businesses that choose to enter the retailing industry?
Question 14 options:
A) Retailing is a relatively difficult field to gain entry.
B) Retailing requires a large capital investment in the initial stages.
C) Retailing allows small business to focus on specific groups of consumers.
D) Retailing requires sophisticated machinery and technical expertise.
E) Retailing suffers from heavy competition and losses only in the initial stages.
Question 15 (1 point)
Identify the less-developed country from among the following.
Question 15 options:
A) The United States
B) New Zealand
C) Great Britain
Question 16 (1 point)
Which of the following can be best defined as a form of licensing in which a company agrees to provide another company a name, logo, methods of operation, advertising, products, and other elements associated with a business in return for a financial commitment and the agreement to conduct business in accordance with their standard of operations?
Question 16 options:
C) Joint venture
D) Strategic alliance
E) Direct investment
Question 17 (1 point)
Which of the following demographic trends has made health care and financial planning industries attractive for small businesses in the United States?
Question 17 options:
A) Decreasing population of millennials
B) Increasing income among Generation X
C) Increasing aged baby boomers who are wealthy
D) Reducing entrepreneurial spirit among young generations
E) Increasing imports into the economy
Question 18 (1 point)
What is the following is true of ethics and social responsibility in business?
Question 18 options:
A) Ethical conduct and corporate social responsibility are linked to increased profits.
B) Businesses do not need to consider social values in the contemporary scenario.
C) Investors and retired employees remain unaffected in case of scandals.
D) Businesses’ reputations depend solely on their profits.
E) Business misconduct is likely to be widely excused if it enhances firms’ profits.
Question 19 (1 point)
Which of the following statements is true of a partnership?
Question 19 options:
A) The partners will not be held responsible for the actions of each other.
B) All the partners will have limited liability.
C) The business will face fewer regulatory controls than a corporation.
D) All partners need to submit quarterly financial statements to stockholders.
E) The owners will tend to have lower earning power than sole proprietors.
Question 20 (1 point)
Which of the following is a true statement about the European Union?
Question 20 options:
A) It is trying to create opportunities to trade with South America.
B) It is working toward the creation of a standardized currency.
C) It is striving to impose customs checks within Europe.
D) It is working toward the abolition of import duties.
E) It is trying to increase value-added taxes.
Question 21 (1 point)
Advertising, personal selling, coupons, and sweepstakes are forms of the _____ aspect of marketing activities.
Question 21 options:
E) social responsibility
Question 22 (1 point)
Codes of ethics foster ethical behavior by:
Question 22 options:
A) highlighting the religious implications of behaving in an unethical manner.
B) limiting the opportunity to behave unethically by providing punishments for violations of the rules and standards.
C) making the employees understand that they should use their own judgment to determine if an action is ethical.
D) pointing out to the employees that ethical behaviors are subjective and are dependent on social perceptions.
E) encouraging employees to be more competitive and profit-oriented.
Question 23 (1 point)
Lever Brothers changed the formula of its bar soap to match different countries’ water conditions and washing habits. This exemplifies a(n):
Question 23 options:
A) globalization strategy.
B) outsourcing strategy.
C) strategic alliance.
D) multinational strategy.
E) joint venture.
Question 24 (1 point)
In a limited partnership:
Question 24 options:
A) the partners can operate the business only for limited time period.
B) the profits earned by the owners are limited by government regulations.
C) all the partners have limited liability.
D) at least one partner has unlimited liability.
E) the partners are free from any liability for the debts of the business.
Question 25 (1 point)
One role of the Federal Trade Commission’s Bureau of Consumer Protection is to protect consumers from _____.
Question 25 options:
A) price rise
B) fraudulent practices
D) misuse of resources
Question 26 (1 point)
The purchase of overseas production and marketing facilities is an example of _____.
Question 26 options:
B) contract manufacturing
C) using an export agent
D) direct investment
Question 27 (1 point)
Which of the following statements is true?
Question 27 options:
A) Business ethics relates to an individual’s values, principles, and standards of conduct.
B) The acceptability of behavior in business is determined only by the organization in question.
C) Social responsibility and social ethics do not mean the same thing.
D) Businesses should only make a profit rather than consider the social implications of their activities.
E) Most unethical activities within organizations are not supported by an organizational culture that encourages employees to bend the rules.
Question 28 (1 point)
Which of the following acts amounts to bullying?
Question 28 options:
A) Trading within insiders
B) Discrediting others’ ideas and opinions
C) Lobbying for or against someone
D) Mediating as a third party
E) Buying or selling of stocks by insiders
Question 29 (1 point)
A manager attempting to take credit for a subordinate’s ideas is engaging in a type of_____.
Question 29 options:
A) conflict of interest
D) misplaced loyalty
E) capture bonding
Question 30 (1 point)
Which of the following has become the first communist country to make strong economic gains by adopting capitalist approaches to business?
Question 30 options:
Question 31 (1 point)
Common stockholders within a corporation:
Question 31 options:
A) act as the board of directors.
B) are completely isolated from its operations.
C) have the right to make a cumulative claim to dividends.
D) are restricted from exercising preemptive rights.
E) receive dividends after preferred stockholders.
Question 32 (1 point)
According to the National Business Ethics Survey, _____ is the number one area of misconduct observed in the workplace.
Question 32 options:
C) abusive behavior
D) misuse of company time
Question 33 (1 point)
A corporation doing business in the state in which it is chartered is known as a(n) _____.
Question 33 options:
A) vertical corporation
B) horizontal corporation
C) domestic corporation
D) quasi corporation
E) alien corporation
Question 34 (1 point)
A nation’s _____ can be best defined as the difference in value between its exports and imports.
Question 34 options:
A) balance of import
B) balance of export
C) balance of trade
D) positive trade surplus
E) negative trade deficit
Question 35 (1 point)
Which of the following can be best defined as a corporation that operates in several countries but without significant ties to any of them?
Question 35 options:
A) A licensor
B) An exporter
C) A monopolist corporation
D) A multinational corporation
E) A contract manufacturing corporation
Question 36 (1 point)
When an entrepreneur takes out a loan from a bank, the bank will require him or her to put up _____, a financial interest in the property or fixtures of the business, to guarantee payment of the loan.
Question 36 options:
B) venture capital
C) trade credit
D) business plan
E) cash flow statement
Question 37 (1 point)
Economic contraction is said to have occurred when:
Question 37 options:
A) GDP increases.
B) spending declines.
C) jobs increase.
D) inflation decreases.
E) unemployment falls.