INTRODUCTION TO BUSINESS (CH
#2,3, 4) EXAM QUESTIONS WITH
COMPLETE ANSWERS
Social Market Model (German) - ANSWER-coordinated market economy, well-
funded social welfare, share markets are stable with few mergers, labour markets
are less flexible, reinvestment is favoured, trade unions play an important role
Asian Model - ANSWER-free market but with strong state intervention, most states
have weak social welfare systems, stock markets are tend to be stable, managers
tend to pursue long-term goals, trade unions tend to be weak
The World Bank has identified five core responsibilities of a state : - ANSWER--
establishing a legal framework
- developing economic policies
- building basic services and infrastructures
- protecting the vulnerable
- protecting the environment
Types of state intervention - ANSWER-- collective provision
- the state as employer
- legal regulation (the law of contract)
- demand management
- protection
Why some enterpreneurs ans small businesses fail ? - ANSWER-- Lack of
management skills required to run a business
- cash flow obstacles
- the mistake of overexpansion
advantages of small business - ANSWER-personal relationships with customers and
employees, ability to adapt to change, simplified record keeping, independence
disadvantages of small business - ANSWER-risk of failure, limited potential, limited
ability to raise capital
Franchisor - ANSWER-an individual or organization granting a franchise
Franchisee - ANSWER-a person or an organization purchasing a franchise
Advantages of Franchising - ANSWER-less risk, training and support, brand
recognition, easier access to funding
Disadvantages of Franchising - ANSWER-costs, lack of control, growth challenges,
restrictions on sale
#2,3, 4) EXAM QUESTIONS WITH
COMPLETE ANSWERS
Social Market Model (German) - ANSWER-coordinated market economy, well-
funded social welfare, share markets are stable with few mergers, labour markets
are less flexible, reinvestment is favoured, trade unions play an important role
Asian Model - ANSWER-free market but with strong state intervention, most states
have weak social welfare systems, stock markets are tend to be stable, managers
tend to pursue long-term goals, trade unions tend to be weak
The World Bank has identified five core responsibilities of a state : - ANSWER--
establishing a legal framework
- developing economic policies
- building basic services and infrastructures
- protecting the vulnerable
- protecting the environment
Types of state intervention - ANSWER-- collective provision
- the state as employer
- legal regulation (the law of contract)
- demand management
- protection
Why some enterpreneurs ans small businesses fail ? - ANSWER-- Lack of
management skills required to run a business
- cash flow obstacles
- the mistake of overexpansion
advantages of small business - ANSWER-personal relationships with customers and
employees, ability to adapt to change, simplified record keeping, independence
disadvantages of small business - ANSWER-risk of failure, limited potential, limited
ability to raise capital
Franchisor - ANSWER-an individual or organization granting a franchise
Franchisee - ANSWER-a person or an organization purchasing a franchise
Advantages of Franchising - ANSWER-less risk, training and support, brand
recognition, easier access to funding
Disadvantages of Franchising - ANSWER-costs, lack of control, growth challenges,
restrictions on sale
