2000 Introduction to Business Page 5
1. An entrepreneur is a person who organizes, operates and assumes the risk for a business venture. / a. True / b. False2. Recovery in the business cycle occurs after a period of recession. / a. True / b. False
3. Risk management is the process of evaluating the risks faced by a firm and then minimizing the costs involved with those risks. / a. True / b. False
4. Medicaid is the form of medical aid for the physically handicapped. / a. True / b. False
5. In term insurance, premiums are paid throughout the employee's lifetime, with the whole amount of the policy paid upon the insurer's death. / a. True / b. False
6. A venture business has no employees other than the owner. / a. True / b. False
7. Retailers generally run 4 types of sales: promotional, clearance, special purchase and holiday. / a. True / b. False
8. One of the main activities of the Office of Consumer Affairs is to prevent one firm from using unfair practices to force competing firms out of business. / a. True / b. False
9. A mutual savings bank is an example of a deposit-type financial institution. / a. True / b. False
10. The main purpose of the Federal Reserve System is to supervise and regulate member banks in order to help service the public. / a. True / b. False
11. When preparing a bank reconciliation, an outstanding check must be added to the bank statement balance. / a. True / b. False
12. Simple interest is an expression of interest based on a one year period of time. / a. True / b. False
13. To compute the cost of credit, you need to know only the principal and interest rate. / a. True / b. False
14. Yield is also referred to as the rate of return. / a. True / b. False
15. The assessed value is the amount used to calculate a person's property taxes. / a. True / b. False
16. Fixed assets are resources whose use will benefit the entrepreneur for more than one year. / a. True / b. False
17. HMO' s emphasize preventive health care. / a. True / b. False
18. Discretionary income is income you spend on things you want for pleasure, satisfaction, and comfort. / a. True / b. False
19. A cash How statement reports what a person or family owns as well as owes. / a. True / b. False
20. Term life insurance involves the accumulation and management of property during one's lifetime and the distribution of one's property at death. / a. True / b. False
21. Intellectual property is a term that describes the rights of entrepreneurs or others in intangible property created through ingenuity or mental effort. / a. True / b. False
22. The Securities and Exchange Commission is a watchdog agency that enforces federal laws pertaining to the stock market. / a. True / b. False
23. A person in the business of buying and selling OTC stocks is a floorbroker. / a. True / b. False
24. Technical analysis concentrates on charting stock prices, trends in the market, and patterns in the indices with the averages. / a. True / b. False
25. A market that is going down is referred to as a bull market. / a. True / b. False
26. Which of the following is not part of the typical research process? / a. Calculating cost / b. Defining the need / c. Finding the facts / d. Analyzing the facts / e. Taking action
27. The person who pumps your gas is part of the / a. natural resources. / b. human resources. / c. capital resources. / d. business cycle. / e. None of the above
28. GDP is / a. the total value of all goods produced in a year. / b. the total value of all final goods and services produced in a year. / c. the total value of all services produced in a year. / d. the total value of all goods and services produced by citizens of a specific nation in a year. / e. the total of all goods and services produced within the boundaries of the country in a year.
29. When the effect of price changes is taken out of GDP, we have / a. inflated GDP. / b. undervalued GDP. / c. real GDP. / d. per capita GDP. / e. underinflated GDP.
30. The business function that bridges the gap between the producer and the consumer is / a. marketing. / b. producing. / c. farming. / d. extracting. / e. financing.
31. Which of the following is not an advantage of a checking account? / a. Convenience / b. Safety / c. Service charges / d. Proof of payment / e. Record of finances
32. A two-dollar broker / a. handles trading in particular stocks. / b. owns his/her own seats on the exchange and makes his/her income from tees. / c. is an alternative to paying full-service brokers. / d. actually executes an order. / e. is licensed by the SEC.
33. The Consumer Price Index is / a. used to monitor the rate of inflation. / b. used to measure the total goods and services produced in a year. / c. a scientific look at the DJIA. / d. used to forecast economic activity 6-9 months down the road. / e. a private corporation.
34. The form of business that requires written permission from the state in which it is organized and can have owners is / a. cooperative. / b. partnership. / c. sole proprietorship. / d. corporation. / e. municipality.
35. The person or group receiving permission from a parent company to sell a product in a certain area in a certain manner is the / a. franchisee. / b. franchisor. / c. operator. / d. owner. / e. developer.
36. Which of the following is not a type of decision-making style? / a. Analytic / b. Conceptual / c. Directive / d. Reflective / e. Behavioral
37. Which of the following is inappropriate during a job interview? / a. Asking questions about the position / b. Dressing appropriately / c. Taking notes / d. Being early / e. Talking too much
38. Which of the following does not apply to small businesses? / a. Usually has the owner as manager / b. Is not dominant in its field of operation / c. Employs fewer than 500 people / d. Usually is local, serving the nearby community / e. Is government owned
39. Stores that offer a wide variety of goods are called / a. full-service stores. / b. specialty stores. / c. convenience stores. / d. warehouse markets. / e. supermarkets.
40. Small stores that carry a wide variety of products and a narrow line / a. full-service store. / b. specialty store. / c. convenience store / d. warehouse market. / e. supermarket.
41. Which of the following is not a consumer right? / a. The right to be informed / b. The right to confidentiality / c. The right to choose / d. The right to be heard / e. The right to a remedy
42. Which of the following is not a consumer responsibility? / a. Be honest / b. Complain reasonably / c. Be involved / d. Report unethical practices / e. Be uninformed
43. Which of the following is not a federal law or regulation related to human resources management? / a. Retirement Act / b. Americans with Disabilities Act / c. Family and Medical Leave Act / d. Privacy Act / e. Equal Pay Act
44. A bank that offers a full range of services, sometimes called a "financial department store," is / a. a savings and loan. / b. a consumer finance company. / c. a commercial bank. / d. the Federal Reserve System. / e. a credit union.
45. One of the Cs of credit, which refers to your honesty and history of paying debts, is known as / a. capacity. / b. character. / c. capital. / d. curiosity. / e. culpability.
46. A record of your transactions during a billing period is called a / a. statement of account. / b. receipt. / c. credit memorandum. / d. credit check. / e. bank reconciliation.
47. The law that requires the prompt correction of billing errors after they have been reported to a creditor is / a. the Fair Credit Reporting Act. / b. the Fair Credit Billing Act. / c. the Lemon Law. / d. the Truth-in-Lending Law. / e. the Fair Credit Act.
48. The rate of return on an investment is also called / a. safety. / b. liquidity. / c. yield. / d. equity. / e. compound interest.
49. A speculative investment usually involves / a. an unusually high risk. / b. a guaranteed rate of return. / c. low risk. / d. securities issued by the federal government. / e. stocks and bonds.
50. Laws that require you to carry certain types of automobile insurance before your car can be licensed are called / a. compulsory insurance laws. / b. financial responsibility laws. / c. insurance laws. / d. assigned-risk plans. / e. collision insurance.
51. Managers use a number of selection devices to choose candidates for a job. Which of these is not one of them? / a. The application form / b. Written tests / c. Age / d. Physical examination / e. Interview
52. Costs that occur regularly and are for the same amount each time are / a. fixed expenses. / b. variable expenses. / c. allowances. / d. budgets. / e. liabilities.
53. An IRA that is used for educational purposes without penalty is called / a. stock. / b. bond. / c. Roth Traditional. / d. 401K. / e. 403B
54. During an interview, it is illegal to ask about / a. prior experience. / b. current salary. / c. marital status. / d. why you are leaving your current job. / e. work attendance..
55. Illegal acts performed by office or professional workers while at work are called / a. blue collar crimes. / b. white collar crimes. / c. hacking. / d. piracy. / e. a virus.
56. Which of the following is not a key economic question? / a. What to produce? / b. How to produce it? / c. For whom to produce? / d. When to to produce? / e. None of the above
57. A goal in life that is fulfilled through a job or a series of jobs is called / a. career planning. / b. career. / c. job. / d. tentative career decision. / e. mobility.
58. The conflict between unlimited wants and limited resources is known as / a. scarcity. / b. resources. / c. drought. / d. needs. / e. human resources.
59. The desire to work for profit is / a. competition. / b. freedom of choice. / c. profit motive. / d. business. / e. private enterprise system.
60. This person takes the extractor's products or raw materials and changes them into a form consumers can use. / a. Manufacturer / b. Wholesaler / c. Extractee / d. Marketer / e. Producer
61. Which of the following is not a function of management? / a. Planning / b. Organizing / c. Controlling / d. Leading / e. Incorporating
62. Stopping the importing or exporting of a certain product or service is called / a. embargo. / b. tariff. / c. trade. / d. quotas. / e. export violations.
63. The negotiations that take place between an organized body of workers and an employer, dealing with wages and working conditions are called / a. grievance procedures. / b. collective bargaining. / c. strikes. / d. pickets. / e. arbitrations.
64. A refusal to work until demands are met is called a / a. boycott. / b. strike. / c. lockout. / d. picket. / e. injunction.
65. The exclusive right to make, use, sell, or license others to make or sell a newly invented product or process is a / a. logo. / b. copyright. / c. patent. / d. slogan. / e. trademark.
66. A situation that exists when the government spends more than it collects is called / a. national debt. / b. deficit. / c. deflation. / d. revenue / e. depression
67. A sales letter written for the purpose of getting a personal interview is a / a. personal data sheet. / b. letter of application. / c. letter of recommendation. / d. application form. / e. reference sheet.
68. Inspecting one wrench of every 50 to make sure it operates correctly is a form of / a. cost control. / b. inventory control. / c. quality control. / d. asset control. / e. management control.
69. SCORE represents / a. Service Corps of Retired Executives. / b. Service Corps of Retired Employees. / c. Service Corporation of Rescued Employees. / d. Security Corps of Retired Entertainers. / e. Security Company of Rigalto Entertainment.
70. Buying too rapidly without much thought is know as / a. comparison shopping. / b. bargain shopping. / c. impulse buying. / d. smart shopping. / e. None of the above
71. A guarantee made orally or in writing that promises a specific quality of performance is a/an / a. guarantee. / b. implied warranty. / c. express warranty. / d. certificate of warranty. / e. manufacturer's warranty.
72. A large computer system that can handle more instructions and process data faster than smaller computers is a / a. mainframe. / b. microcomputer. / c. minicomputer. / d. super computer. / e. central processing unit.
73. Money put into a checking account is a/an / a. check. / b. investment. / c. time deposit. / d. NOW account. / e. demand deposit.
74. A form attached to a check that keeps a record of the checks written and any current deposit is a / a. deposit slip. / b. check register. / c. checkbook. / d. check stub. / e. sharedraft.
75. The owner of the checking account and the person who signs the checks is the / a. drawer. / b. drawee. / c. payee. / d. endorser. / e. joint owner.
76. This type of endorsement consists of only the endorser's name. / a. Special / b. Full / c. Restrictive / d. Multiple / e. Blank
77. A form sold by a bank stating that money is to be paid to the person or business named on the form is a / a. bank money order. / b. postal money order. / c. express money order. / d. telegraphic money order. / e. traveler's check.
78. Anyone who buys on credit or receives a loan is a / a. creditor. / b. debtor. / c. character. / d. loan officer. / e. trustee.
79. Which of the following is the formula for computing simple interest? / a. P=I*R'"T / b. I=P*R*T / c. I*P=R*T / d. T=P*I/R / e. R-P-'T-T
80. Calculate the simple interest of $1000 borrowed at 9 for 12 months. / a. $9,000 / b. $900 / c. $90 / d. $9 / e. .90
81. Calculate the interest on a loan for $ 100 at 12 for 60 days. / a. $7.20 / b. $2 / c. $20 / d. $72.00 / e. $6