Chapter 1 - Organizational Management
1. Lance is a first-line manager at a telemarketing company. He allocates resources, forms an organizational structure, and recruits and places employees. Which of the following functions of management BEST describes what Lance does?
a. planning
b. organizing
c. controlling
d. leading
2. Jarvis runs a restaurant that is struggling to keep customers satisfied. He is a strict manager and prefers to make all the decisions himself. A concerned friend recommends that he delegate more responsibility to his employees. Which of the following is the MOST likely effect of delegating responsibility?
a. Customers will be upset because the restaurant is being run differently.
b. Customer satisfaction will improve because employees can be more responsive to customer needs.
c. Productivity will go down because his employees will make the wrong decisions.
d. Employees will use their extra freedom to goof off.
3. Jonathan is a manager who is known to have technical skills, while Michelle is good at time management. George relies on his conceptual skills, and Anna has great interpersonal skills. If a new market opportunity or potential threat arises, which manager would be able to best analyze the impending outcomes of his or her decision?
a. Jonathan
b. Michelle
c. George
d. Anna
4. All of these fall directly under the responsibility of first-line managers EXCEPT:
a. assessing weekly productivity.
b. developing an annual budget.
c. scheduling specific employees.
d. checking daily quality control.
Chapter 2 - Human Resources Management
1. An executive who is paid $2.5 million each year to achieve results even if that means working 5 hours one day and 15 the next is typically paid a(n):
a. wage.
b. salary.
c. incentive.
d. benefit.
2. The legal concept of ________ holds that both employer and employee have the mutual right to terminate an employment relationship at any time, for any reason, and without advance notice to the other.
a. mutual consent
b. quid pro quo
c. affirmative action
d. employment-at-will
3. Which technique for screening job applicants is most likely to introduce bias?
a. standardized application forms
b. interview
c. drug testing
d. aptitude tests
4. Money is most likely to motivate employees if it is tied directly to:
a. hours worked.
b. performance.
c. job satisfaction.
d. human relations skills.
5. Hans works in a company with just under 100 employees. When he breaks his wrist in a bicycle accident, he is unable to work while the bones heal. Which of the following acts enables him to take up to 12 weeks of unpaid time off?
a. Fair Labor Standards Act (FLSA)
b. Consolidated Omnibus Budget Reconciliation Act (COBRA)
c. Health Insurance Portability and Accountability Act (HIPPA)
d. Family and Medical Leave Act (FMLA)
Chapter 3 - Business Law and Ethics
1. Joe paid John less than he deserved because he knew John needed the job badly. Joe's behavior may be considered:
a. unethical.
b. neither illegal nor unethical.
c. illegal and unethical.
d. illegal.
2. In ensuring that employees behave ethically, perhaps the most effective step that a company can take is to:
a. accommodate employees range of opinions about ethics.
b. actively demonstrate management support of ethical standards.
c. distinguish between illegal and unethical behavior.
d. adopt a code of ethics.
3. An example of a firm's investors would be its:
a. customers.
b. stockholders.
c. employees.
d. suppliers.
4. In the United States, tobacco companies are legally required to include warnings to smokers on their products and to limit advertising to prescribed media. Within the U.S., they follow these rules but use more aggressive methods in countries with no such rules. As such, tobacco companies typically adopt a(n) ________ stance to social responsibility in marketing their products.
a. obstructionist
b. proactive
c. accommodative
d. defensive
Chapter 4 - Business Accounting
1. Which of the following are entered into journals and transferred into the general ledger?
a. liabilities
b. assets
c. transactions
d. budgets
2. Allison's bookstore has taken a loss for the last few months, but sales have been steady and she is unsure where the problem lies. She hires a public accountant to look over her financial records and discover where her revenues are being spent. The accountant finds that her inventory has been mismanaged: books are being overstocked and suppliers are not being paid on time. Which of the following accounting functions is the public accountant carrying out for Allison?
a. managerial accounting
b. payroll accounting
c. financial accounting
d. tax accounting
3. Basic accounting reports follow which of the following accounting equations?
a. owners' equity = assets + liabilities
b. assets = liabilities + owners' equity
c. liabilities = owners' equity - assets
d. assets = liabilities - owners' equity
4. You opened a business last year. If you were handling the financial statements, which of the following company obligations would you NOT include in your "accounts payable"?
a. invoices from suppliers
b. office electricity/water bills
c. employee salaries
d. employee health insurance
5. Which of the following interpretations of a low liquidity ratio is MOST likely correct?
a. inefficient management of surplus cash
b. greater financial leverage with creditors
c. efficient management of cash flow
d. inability to pay current debts
Chapter 5 - Personal Finance and Economics
1. Joshua just resigned from his job as an information technology specialist at a leading manufacturing firm in the United States. He wants to make a financial plan to manage the money he saved and the property he's acquired over the past few years. The first thing he needs to do is:
a. build a monthly personal budget.
b. decide how to allocate his investments.
c. take a financial inventory of his assets and liabilities.
d. set financial goals for the future.
2. Louie is planning to start a business that will require borrowing money from a bank. Which of the following actions over the course of the previous few years would likely reduce Louie's credit rating when applying for the loan?
a. carrying a low balance in his checking account
b. carrying a large balance on his credit cards
c. paying off his entire credit card balance every month
d. paying a previous loan off early
3. Although she purchased health insurance, Nita decided not to bother buying life insurance. Which of the following reasons is MOST LIKELY her reasoning behind this?
a. She is married with children, but her spouse cannot work.
b. She is single with no one depending on her.
c. She is middle-aged, but in good health.
d. She is elderly, and there is little reason to buy insurance.
4. Griffin is just starting out in the business world, but he wants to start planning for retirement right away. Which of the following types of investments would allow him to defer paying taxes on the money invested until after retirement?
a. mutual fund
b. 401(k)
c. Roth IRA
d. certificate of deposit (CD)
Chapter 6 - Computation; Quantitative Analysis
1. Find the sale price of an item whose original price is $120 and the rate of discount is 18%.
a. $21.60
b. $141.60
c. $216
d. $98.40
2. If a person who works full time earns $19,650 per year, estimate that person's hourly salary. Use rounding to make the resulting calculations simple.
a. $10
b. $5
c. $20
d. $30
3. Suppose that you invest $9000 in a risky investment. At the end of the first year, the investment has decreased by 30% of its original value. At the end of the second year, the investment increases by 40% of the value it had at the end of the first year. Your investment consultant tells you that there must have been a 10% overall increase of the original $9000 investment. Is this an accurate statement? If not, what is your actual percent gain or loss on the original $9000 investment? Round to the nearest percent.
a. A 10 % increase of the original investment is correct.
b. A 10 % increase of the original investment is not correct. The true result is a loss of 1%.
c. A 10 % increase of the original investment is not correct. The true result is a gain of 1%.
d. A 10 % increase of the original investment is not correct. The true result is a loss of 2%.
Chapter 7 - Microeconomics
1. A microeconomist working for a toy manufacturer would most likely collect data on:
a. changes in supply and demand for toys over the past year.
b. changes in the fall unemployment rate of parents of children ages 5-12.
c. changes in the number of families with children ages 5-12 over the past year.
d. changes in the inflation rate at the beginning of December.
2. In a market economy, the focus of production is on:
a. increasing efficiency and profitability.
b. ensuring quality over quantity.
c. increasing supply with respect to demand.
d. ensuring a fair and equal distribution of products.
3. A company that manufactures new aircraft operates in which of the following types of market structures?
a. monopolistic competition
b. monopoly
c. perfect competition
d. oligopoly
4. What makes monopolistic competition different from an oligopoly?
a. little differentiation between products
b. greater government regulation
c. fewer competitors
d. fewer barriers to entry
Chapter 8 - Macroeconomics
1. The ________ measures inflation by creating a "market basket" of a specified set of goods and services that represent the average buying pattern of urban households.
a. gross domestic product
b. consumer price index
c. consumer confidence index
d. producer price index
2. All of the following are functions of the Federal Reserve System EXCEPT:
a. setting tax and spending levels.
b. trading in foreign exchange markets.
c. changing certain interest rates.
d. buying and selling government securities.
3. All of the following are often associated with an increase in the money supply EXCEPT:
a. increase in demand for labor.
b. increase in consumer spending.
c. increase in supply of goods.
d. increase in prices of goods.
4. Carl and Stella plan to get a mortgage loan for a new house. However, they are waiting for the best time to get a loan with a low interest rate. Which of these economic indicators will tell them that it may be a good time to take out a loan?
a. The Federal Funds rate increases.
b. The unemployment rate increases.
c. Gross domestic product increases.
d. The Consumer Price Index increases.