Summary Principles of
Business Test Bank
Enlightened firms are realizing that empowerment puts too much stress on employees and
are eliminating empowerment programs. - ANSWERSFalse
Ethical decision making begins in the marketing department. - ANSWERSFalse
The corporation's board of directors elects the corporate officers. - ANSWERSTrue
The national debt is the accumulation of deficits that have occurred in the past as a result of
expenditures exceeding tax revenues. - ANSWERSTrue
The International Monetary Fund (IMF) was created to promote trade through financial
cooperation by working to eliminate trade barriers. - ANSWERSTrue
A person who buys a franchise has the same level of control as an entrepreneur who opens
his or her own sole proprietorship. - ANSWERSFalse
Economics is the study of a society's financial institutions. - ANSWERSfalse
Armenia had a favorable balance of trade in 2018 when it exported $800 million in goods
and services and imported $1.5 billion. - ANSWERSFalse
Some multinational corporations are so large that they resemble small countries. -
ANSWERSTrue
Human rights include an individual's right to life, to freedom, and to the pursuit of
happiness. - ANSWERSTrue
,The situation in which the average of all prices of products is rising is called inflation. -
ANSWERSTrue
As a factor of production, capital includes money. - ANSWERSFalse
Social factors influence what, how, where, and when to purchase products or services. -
ANSWERSTrue
It is a firm's responsibility to its customers to deliver what it has promised. - ANSWERSTrue
Many people consider knowledge to be a fifth factor of production. - ANSWERSTrue
List the two international financial organizations that are instrumental in fostering global
trade. - ANSWERSThe World Bank
International Monetary Fund
Who are the owners of a corporation? - ANSWERSStockholder/ Shareholders
Which form of business ownership is an ideal way to test new business ideas? -
ANSWERSSole Proprietorship
What happens when a country lowers the value of its currency relative to other countries? -
ANSWERSDevaluation makes that country's exports cheaper and should help the balance of
payments. It gives its exports an unfair competitive advantage.
List the three major categories of business ownership. - ANSWERSSole Proprietorships,
partnerships, and corporations.
The Department of Natural Resources spent money to promote the use of national parks as
perfect sites for a summer vacation causing motels, campgrounds and other tourist
attractions in the private sector to become less attractive to consumers. Consequently
consumers spent more money on trips to the national parks and less money in the private
sector for their vacations resulting in _____. - ANSWERScrowding out
, A _____ regulation in the United States bans the use of foreign steel in constructing U.S.
highways. - ANSWERSbuy-national regulation
The two types of inflation are: - ANSWERSdemand-pull and cost-push
The original purpose of the _____ was to help build infrastructure in developing countries
and to help relief the debt burden of these countries. - ANSWERSWorld Bank
Currency markets operate under a system called _____. This means that prices of currencies
vary based upon demand and supply of that currency. - ANSWERSfloating exchange rate
In the middle of the desert in Arizona, there are five service stations competing for all the
business that exists in this isolated location. When one service station lowers its price on
gas, all must follow suit. These service stations are operating in a(n) _____ market structure.
- ANSWERSoligopoly
PGE supplies all of the electricity to Portland, Oregon. PGE is an example of: - ANSWERSa
pure monopoly
All of the following terms are associated with international trade EXCEPT: -
ANSWERSdiscount rate
A natural barrier that faces Argentina when it sells beef to Siberia is: - ANSWERSdistance
Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men
were the ones who sailed, and women were their crew. She finally did convince someone to
teach her to sail, and after mastering sailing, she started an all-woman sailing school called
Womanship as a sole proprietorship. When she dies, the: - ANSWERSbusiness dies with her
Seeds of Change manufactures and markets certified organic entrees. Its mission reads, "At
Seeds of Change, we're committed to making delicious foods that are healthy for you as well
as the planet." In support of this mission, the company donates money to support
Business Test Bank
Enlightened firms are realizing that empowerment puts too much stress on employees and
are eliminating empowerment programs. - ANSWERSFalse
Ethical decision making begins in the marketing department. - ANSWERSFalse
The corporation's board of directors elects the corporate officers. - ANSWERSTrue
The national debt is the accumulation of deficits that have occurred in the past as a result of
expenditures exceeding tax revenues. - ANSWERSTrue
The International Monetary Fund (IMF) was created to promote trade through financial
cooperation by working to eliminate trade barriers. - ANSWERSTrue
A person who buys a franchise has the same level of control as an entrepreneur who opens
his or her own sole proprietorship. - ANSWERSFalse
Economics is the study of a society's financial institutions. - ANSWERSfalse
Armenia had a favorable balance of trade in 2018 when it exported $800 million in goods
and services and imported $1.5 billion. - ANSWERSFalse
Some multinational corporations are so large that they resemble small countries. -
ANSWERSTrue
Human rights include an individual's right to life, to freedom, and to the pursuit of
happiness. - ANSWERSTrue
,The situation in which the average of all prices of products is rising is called inflation. -
ANSWERSTrue
As a factor of production, capital includes money. - ANSWERSFalse
Social factors influence what, how, where, and when to purchase products or services. -
ANSWERSTrue
It is a firm's responsibility to its customers to deliver what it has promised. - ANSWERSTrue
Many people consider knowledge to be a fifth factor of production. - ANSWERSTrue
List the two international financial organizations that are instrumental in fostering global
trade. - ANSWERSThe World Bank
International Monetary Fund
Who are the owners of a corporation? - ANSWERSStockholder/ Shareholders
Which form of business ownership is an ideal way to test new business ideas? -
ANSWERSSole Proprietorship
What happens when a country lowers the value of its currency relative to other countries? -
ANSWERSDevaluation makes that country's exports cheaper and should help the balance of
payments. It gives its exports an unfair competitive advantage.
List the three major categories of business ownership. - ANSWERSSole Proprietorships,
partnerships, and corporations.
The Department of Natural Resources spent money to promote the use of national parks as
perfect sites for a summer vacation causing motels, campgrounds and other tourist
attractions in the private sector to become less attractive to consumers. Consequently
consumers spent more money on trips to the national parks and less money in the private
sector for their vacations resulting in _____. - ANSWERScrowding out
, A _____ regulation in the United States bans the use of foreign steel in constructing U.S.
highways. - ANSWERSbuy-national regulation
The two types of inflation are: - ANSWERSdemand-pull and cost-push
The original purpose of the _____ was to help build infrastructure in developing countries
and to help relief the debt burden of these countries. - ANSWERSWorld Bank
Currency markets operate under a system called _____. This means that prices of currencies
vary based upon demand and supply of that currency. - ANSWERSfloating exchange rate
In the middle of the desert in Arizona, there are five service stations competing for all the
business that exists in this isolated location. When one service station lowers its price on
gas, all must follow suit. These service stations are operating in a(n) _____ market structure.
- ANSWERSoligopoly
PGE supplies all of the electricity to Portland, Oregon. PGE is an example of: - ANSWERSa
pure monopoly
All of the following terms are associated with international trade EXCEPT: -
ANSWERSdiscount rate
A natural barrier that faces Argentina when it sells beef to Siberia is: - ANSWERSdistance
Suzanne Pogell wanted to learn to sail, but she could find no one to teach her because men
were the ones who sailed, and women were their crew. She finally did convince someone to
teach her to sail, and after mastering sailing, she started an all-woman sailing school called
Womanship as a sole proprietorship. When she dies, the: - ANSWERSbusiness dies with her
Seeds of Change manufactures and markets certified organic entrees. Its mission reads, "At
Seeds of Change, we're committed to making delicious foods that are healthy for you as well
as the planet." In support of this mission, the company donates money to support
