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Introduction To Business - Section 65z - Spring 2009 - Part 2

156 Questions
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Introduction to Business - Section 65Z - Spring 2009- part 2

Questions and Answers
  • 1. 
    A ____________________ is a partnership in which companies from two different countries join to undertake a major project.
    • A. 

      Multinational cooperative

    • B. 

      Joint venture

    • C. 

      Franchisee transfer

    • D. 

      Recruit affiliation

  • 2. 
    _______ involves the production of private-label goods by a foreign company to which a company then attaches its brand name or trademark.
    • A. 

      Franchising

    • B. 

      Contract manufacturing

    • C. 

      Import trading

    • D. 

      Export trading

  • 3. 
    A ____________________ represents a long-term partnership between two or more companies established to help each firm build competitive market advantages.
    • A. 

      Multinational values

    • B. 

      Shared venture

    • C. 

      Global franchise

    • D. 

      Strategic alliance

  • 4. 
    A specialized organization that assists businesses in creating relationships with foreign customers and suppliers is known as a(n):
    • A. 

      Export trading companies

    • B. 

      International brokerage houses

    • C. 

      Keiretsu

    • D. 

      Global trade bank

  • 5. 
    Pillsbury is a firm that operated throughout the United States, even when it was wholly owned by a British company, Grand Metropolitan. Pillsbury was an example of a:
    • A. 

      Licensed venture

    • B. 

      Joint venture

    • C. 

      Export trading company

    • D. 

      Foreign subsidiary

  • 6. 
    A risk unique to firms with direct investment in a foreign county is the potential takeover of the firm's assets by the government of that country. This takeover is called a(n):
    • A. 

      Hostile takeover

    • B. 

      Political bias

    • C. 

      Unholy alliance

    • D. 

      Expropriation

  • 7. 
    Granting a foreign company the right to manufacture your product or to use your firm's trademark in return for a fee is called:
    • A. 

      A joint venture

    • B. 

      A foreign subsidiary

    • C. 

      Licensing

    • D. 

      Outsourcing

  • 8. 
    Which of the following assures exporters that they will receive prompt payment for their global market transactions?
    • A. 

      A joint venture

    • B. 

      A Letter of credit

    • C. 

      An Export license agreement

    • D. 

      An Import payment standard

  • 9. 
    Which of the following strategies for reaching global markets involves the lowest risk and offers the lowest profit potential?
    • A. 

      A joint venture

    • B. 

      A foreign subsidiary

    • C. 

      Contract manufacturing

    • D. 

      Licensing

  • 10. 
    A key feature of a(n) ____________________ is that it has manufacturing and marketing facilities in many different countries
    • A. 

      Trade cartel

    • B. 

      Import trading company

    • C. 

      Export forwarding company

    • D. 

      Multinational corporation

  • 11. 
    The federal government created ___________ to help small and medium sized businesses get involved in exporting
    • A. 

      The World Trade Organization

    • B. 

      Federal Export Loan Banks

    • C. 

      Export Assistance Centers

    • D. 

      The Federal Trade Promotion Commission

  • 12. 
    All of the following are recognized as being potential hurdles to be overcome in global trading except:
    • A. 

      Different cultures

    • B. 

      Different languages

    • C. 

      Different money systems

    • D. 

      Lack of market opportunities

  • 13. 
    ____________ occurs when a country lowers the value of its currency relative to the currency of other nations
    • A. 

      Devaluation

    • B. 

      Extrapolation

    • C. 

      Depreciation

    • D. 

      Downward justification

  • 14. 
    __________ is the exchange of merchandise or services for other merchandise or services without the exchange of money.
    • A. 

      Exporting

    • B. 

      Bartering

    • C. 

      Importing

    • D. 

      Factoring

  • 15. 
    Under a system of floating exchange rates, changes in the value of the U.S. dollar relative to other currencies are the result of:
    • A. 

      Negotiated rate adjustments between the U.S. government and the World Trade Organization

    • B. 

      Decisions by the Federal Reserve Board of Governors in order to implement monetary policy

    • C. 

      Fluctuations in the world price of gold

    • D. 

      Changes in the supply of and/or demand for dollars in the global currency market

  • 16. 
    ____________ describes an attitude held by some American business people that our culture is superior to all others and that everyone else should adopt the American way of doing things.
    • A. 

      Primary culture

    • B. 

      Ethnocentricity

    • C. 

      Cultural institutionalism

    • D. 

      Social myopia

  • 17. 
    Which of the following represents the value of one nation's currency relative to the currencies of another country?
    • A. 

      Euro rate

    • B. 

      Currency rate

    • C. 

      Exchange rate

    • D. 

      Standard of living

  • 18. 
    The legislation that prohibits U.S. businesses from making "questionable" or "dubious" payments to foreign officials to secure business contracts is the           ________ Act
    • A. 

      Foreign Corrupt Practices

    • B. 

      Foreign Anti-trust

    • C. 

      Multinational Collusion

    • D. 

      Global Good Conduct

  • 19. 
    Which of the following terms describes the set of values, beliefs, rules, language, and institutions held by a specific group of people?
    • A. 

      Culture

    • B. 

      Ethnocentricity

    • C. 

      Institutional society

    • D. 

      Social myopia

  • 20. 
    Selling the same product in essentially the same way worldwide is known as:
    • A. 

      Socio-cultural based marketing

    • B. 

      Universal sales standards

    • C. 

      Single-phase marketing

    • D. 

      Global marketing

  • 21. 
    Which of the following describes a complex form of bartering involving several countries?
    • A. 

      Countertrading

    • B. 

      Countertrading

    • C. 

      Counter intuitive

    • D. 

      Geiger counter

  • 22. 
    ______________ is the economic theory advocating that a nation should try to sell more goods to other nations than it buys from them
    • A. 

      Capitalism

    • B. 

      Comparative advantage

    • C. 

      Mercantilism

    • D. 

      Inflation

  • 23. 
    Labor unions and businesses in the heavy equipment industry have asked the U.S. Congress to place a tax on imported equipment in order to make it more expensive. They hope that this will allow U.S. producers to be more competitive. The U.S. heavy equipment industry appears to be seeking a(n):
    • A. 

      Injunction

    • B. 

      Revenue tariff

    • C. 

      Nontariff barrier

    • D. 

      Protective tariff

  • 24. 
    The __________ represents the first attempt to establish a truly global mediation center to resolve international trade disputes
    • A. 

      International Trade Court

    • B. 

      World Trade Organization

    • C. 

      Global Trade Commission

    • D. 

      United Nations Arbitration Center

  • 25. 
    ___________ is the use of government regulations to limit the import of goods and services.
    • A. 

      Trade protectionism

    • B. 

      Fiscal policy

    • C. 

      Countertrade policy

    • D. 

      Monetary policy

  • 26. 
    A(n) __________ refers to a complete ban of the imports or exports of certain products from a specific country.
    • A. 

      Absolute tariff

    • B. 

      Health quarantine

    • C. 

      Quota

    • D. 

      Embargo

  • 27. 
    Differences in electrical power and transportation systems can present special problems for U.S. firms when attempting to enter global markets. These represent the __________ forces that impact global business.
    • A. 

      Physical and environmental

    • B. 

      Legal and regulatory

    • C. 

      Economic

    • D. 

      Governmental

  • 28. 
    The three countries participating in NAFTA are:
    • A. 

      Canada, Panama, and the United States

    • B. 

      Mexico, Panama, and the United States

    • C. 

      Canada, Nicaragua, and Mexico

    • D. 

      Canada, Mexico, and the United States

  • 29. 
    The common market arrangement that groups Brazil, Argentina, Paraguay, Uruguay, Chile, and Bolivia is called the:
    • A. 

      South American Six

    • B. 

      World Trade Organization (WTO)

    • C. 

      Latin Free Trade Zone

    • D. 

      Mercosur

  • 30. 
    ________ tariffs are designed to raise money for the government
    • A. 

      Regulatory

    • B. 

      Revenue

    • C. 

      Price

    • D. 

      Profit

  • 31. 
    In an effort to protect domestic jobs, some countries will place a limit on the number of certain types of products that can be imported. These limits are called:
    • A. 

      Revenue tariffs

    • B. 

      Protective tariffs

    • C. 

      Import quotas

    • D. 

      Tariffs

  • 32. 
    At present, China has a comparative advantage over the United States in the production of aircraft.
    • A. 

      True

    • B. 

      False

  • 33. 
    At present, China has a comparative advantage over the United States in the production of clothing
    • A. 

      True

    • B. 

      False

  • 34. 
    The Theory of Comparative Advantage implies that only two-way flows of goods (one good for another) make the citizens of the trading nations better off. One-way flows of goods (with money coming the other way) do not
    • A. 

      True

    • B. 

      False

  • 35. 
    One hundred percent of the goods exported to Japan from the United States in 2007 were in one of the following four product categories: nuclear reactors (and spare parts for them), aircraft, medical and industrial equipment, or cereal grains
    • A. 

      True

    • B. 

      False

  • 36. 
    The United States had a favorable balance of trade with Japan in 2007.
    • A. 

      True

    • B. 

      False

  • 37. 
    According to the story Mr. Lilly told, if the United States ran a trade deficit with Japan forever, Americans would become far wealthier than they are today
    • A. 

      True

    • B. 

      False

  • 38. 
    Chapter 3 is our one chapter on
    • A. 

      Economics

    • B. 

      Management

    • C. 

      Marketing

    • D. 

      international business

  • 39. 
    Nations are trading with one another in  
    • A. 

      Slowly declining volumes

    • B. 

      Approximately constant volumes

    • C. 

      Ever-increasing volumes

  • 40. 
    In 1968, world trade (trade between all nations combined) was approximately _____________ dollars a year
    • A. 

      $315 million

    • B. 

      $31 billion

    • C. 

      $315 billion

    • D. 

      $31 trillion

  • 41. 
    In 2007, world trade was ______________ dollars a year
    • A. 

      $315 billion

    • B. 

      $630 billion

    • C. 

      $1.3 trillion

    • D. 

      $13.25 trillion

    • E. 

      $17.5 trillion

  • 42. 
    Between 1968 and 2007, world trade  
    • A. 

      Tripled

    • B. 

      Quadrupled

    • C. 

      Increased 12-fold

    • D. 

      increased 55-fold

  • 43. 
    In 1968, world trade was about ____ percent of world gross domestic product
    • A. 

      2

    • B. 

      4

    • C. 

      6

    • D. 

      8

  • 44. 
    In 2007, world trade was about ____ percent of world gross domestic product
    • A. 

      21

    • B. 

      23

    • C. 

      25

    • D. 

      27

  • 45. 
    Why has world trade increased so much since 1968?
    • A. 

      One reason: mutual reductions of import tariffs by countries

    • B. 

      Two reasons: mutual reductions of import tariffs by countries, and steady reductions of transportation costs

    • C. 

      Three reasons: mutual reductions of import tariffs by countries, steady reductions of transportation costs, and the increasing debt loads carried by third world countries.

    • D. 

      Four reasons: mutual reductions of import tariffs by countries, steady reductions of transportation costs, the increasing debt loads carried by third world countries, and a concerted effort by developed nations to ensnare developing nations on a treadmill of ever-increasing exports.

  • 46. 
    In 1947, the average tariff on industrial goods was
    • A. 

      4%.

    • B. 

      14%

    • C. 

      40%.

    • D. 

      400%.

  • 47. 
    Today, the average tariff on industrial goods is less than  
    • A. 

      4%.

    • B. 

      14%.

    • C. 

      40%.

    • D. 

      400%.

  • 48. 
    When you eliminate import tariffs, what you're essentially saying is
    • A. 

      Price doesn't matter

    • B. 

      May the best (most efficient) company win.

    • C. 

      These tariffs are too expensive to collect

    • D. 

      All of the above

    • E. 

      None of the above

  • 49. 
    In 1817, English economist David Ricardo published a book in which he explained
    • A. 

      The Theory of Natural Selection

    • B. 

      The Theory of Moral Sentiments

    • C. 

      The Theory of Comparative Advantage

    • D. 

      The Theory of Competitive Advantage

  • 50. 
    For the purposes of determining which nations have a comparative advantage over other nations in the production of a given good, efficiency is measure in units of
    • A. 

      Output (in either units or dollars) per labor hour

    • B. 

      Output (in either units or dollars) per pound of input

    • C. 

      Output (in either units or dollars) per dollar of input

    • D. 

      All of the above

    • E. 

      None of the above

  • 51. 
    Your nation will have a favorable balance of trade with other nations if it  
    • A. 

      Imports more than it exports

    • B. 

      Exports more than it imports

    • C. 

      Spends more than it collects from taxes

    • D. 

      Collects more from taxes than it spends

    • E. 

      None of the above

  • 52. 
    Technically, to look at the balance of trade between the U.S. and Japan (in a given year,) I should look at the trade in  
    • A. 

      Goods only

    • B. 

      Services only

    • C. 

      Both goods and services

  • 53. 
    The United States has run a trade ____________ with Japan for at least the last ______ years
    • A. 

      Surplus; five

    • B. 

      Deficit; 25

    • C. 

      Surplus; 25

    • D. 

      None of the above

  • 54. 
    The second statistic countries use to see how their economies are faring in the international marketplace is called the balance of trade.
    • A. 

      True

    • B. 

      False

  • 55. 
    Like imports, tourism in the United States hurts the United States' balance of payments vis-a-vis other nations. So the more tourists that come here, the worse our balance of payments deficit becomes.
    • A. 

      True

    • B. 

      False

  • 56. 
    Every time an American travels in Japan, other things being equal, it worsens our trade balance with Japan.  
    • A. 

      True

    • B. 

      False

  • 57. 
    Pepsi Cola has been more successful in Japan with its strategy of opening a foreign subsidiary than Coca-Cola has been with its strategy of licensing to Japanese businessmen the right to make and sell its products.
    • A. 

      True

    • B. 

      False

  • 58. 
    Money flows into and out of a country are classified as foreign investment flows when ____________ are purchased
    • A. 

      Assets

    • B. 

      Goods

    • C. 

      Services

    • D. 

      All of the above

    • E. 

      None of the above

  • 59. 
    The only component of our (the U.S.'s) balance of payments deficit (with the rest of the world) in 2003 that was FAVORABLE was  
    • A. 

      Trade

    • B. 

      Tourism

    • C. 

      Overseas military operations

    • D. 

      Foreign investment

    • E. 

      None of the above

  • 60. 
    In 2003, the U.S. had ________________ balance of trade and _______________ balance of payments with the rest of the world
    • A. 

      An unfavorable; an unfavorable

    • B. 

      An unfavorable; a favorable

    • C. 

      A favorable; an unfavorable

    • D. 

      A favorable; a favorable

  • 61. 
    By far the largest component in our (the United States') balance of payments in 2003 was from  
    • A. 

      Overseas military operations

    • B. 

      Trade

    • C. 

      Foreign investment.

    • D. 

      Tourism

  • 62. 
    A country will call its balance of payments favorable if and only if
    • A. 

      More money flows out of the country than into the country that year

    • B. 

      More money flows into the country than out of the country that year

    • C. 

      Neither of the above

  • 63. 
    In the chapter 3 part 2 slides, the acronym OPM was used to represent the expression  
    • A. 

      Office of the Product Manager

    • B. 

      Oracle Process Manufacturing

    • C. 

      Online Portfolio Management

    • D. 

      Other Peoples' Money

  • 64. 
    Franchising is a special form of  
    • A. 

      Exporting

    • B. 

      Licensing

    • C. 

      Foreign subsidiary

    • D. 

      Joint venture

  • 65. 
    Hewlett-Packard Corporation is headquartered in the United States, and has foreign subsidiaries in many foreign countries
    • A. 

      True

    • B. 

      False

  • 66. 
    In general, foreign subsidiaries must operate in compliance with all applicable laws of the countries in which they operate
    • A. 

      True

    • B. 

      False

  • 67. 
    A company can engage in foreign direct investment without operating a foreign subsidiary
    • A. 

      True

    • B. 

      False

  • 68. 
    Many large, successful companies have made mistakes that have cost them millions of dollars when marketing their products in foreign countries
    • A. 

      True

    • B. 

      False

  • 69. 
    Currency exchange rate fluctuations add an additional degree of risk to profits earned overseas, as compared to profits earned in the company's own home country.  
    • A. 

      True

    • B. 

      False

  • 70. 
    When the dollar weakens, the profits of U.S.-based manufacturers that do a lot of exporting generally go down
    • A. 

      True

    • B. 

      False

  • 71. 
    In general, a weakening dollar will have a negative effect on the welfare of a U.S. student traveling in Europe
    • A. 

      True

    • B. 

      False

  • 72. 
    In general, a weakening dollar will have a negative effect on the welfare of a U.S.-based importer such as Cost Plus Imports or Pier 1 Imports
    • A. 

      True

    • B. 

      False

  • 73. 
    In general, a weakening dollar will have a negative effect on the welfare of a U.S.-based manufacturer that earns over 50% of its revenues from overseas sales.
    • A. 

      True

    • B. 

      False

  • 74. 
    If yesterday a dollar bought .63 Euro, and today a dollar buys .62 Euro, then it would be correct to say that the dollar has strengthened overnight
    • A. 

      True

    • B. 

      False

  • 75. 
    If yesterday a dollar bought .63 Euro, and today a dollar buys .62 Euro, then it would be correct to say that the dollar has gone up overnight
    • A. 

      True

    • B. 

      False

  • 76. 
    The World Trade Organization was established by the Uruguay Round of Amendments to the GATT
    • A. 

      True

    • B. 

      False

  • 77. 
    The international court of the World Trade Organization has jurisdiction only over the countries that have signed the GATT, and only with respect to the provisions of the GATT
    • A. 

      True

    • B. 

      False

  • 78. 
    New United Motors (Nummi) is an example of  
    • A. 

      Licensing

    • B. 

      Exporting

    • C. 

      A foreign subsidiary

    • D. 

      A joint venture

    • E. 

      All of the above

  • 79. 
    The definition of strategic alliance presented in lecture is:  
    • A. 

      A long-term partnership between two or more companies established to help each company build competitive market strategies

    • B. 

      A long-term partnership between two or more companies that does not create a jointly-owned subsidiary

    • C. 

      A long-term partnership between two or more companies

    • D. 

      None of the above

  • 80. 
    Foreign subsidiaries are a special case of  
    • A. 

      Exporting

    • B. 

      Licensing

    • C. 

      International joint ventures

    • D. 

      Foreign direct investment

  • 81. 
    U.S.-based exporters like Hewlett-Packard, Sun Microsystems, Cisco, Intel, and Microsoft generally benefit from a ___________ dollar.
    • A. 

      Stronger

    • B. 

      Weaker

    • C. 

      Cannot be determined from the information given

  • 82. 
    According to Mr. Lilly's lecture, when the dollar weakens, it tends to ___________ America's trade deficit.  
    • A. 

      Hurt

    • B. 

      Help

    • C. 

      Cannot be determined from the information given

  • 83. 
    Mercantilism is an economic policy in which a country tries to ensure that  
    • A. 

      Its imports are greater than its exports

    • B. 

      Its exports are greater than its imports

    • C. 

      Its expenses are greater than its tax revenues

    • D. 

      Its tax revenues are greater than its expenses

    • E. 

      None of the above

  • 84. 
    Import tariffs are a quick and reliable way to  
    • A. 

      Decrease the level of imports into your country

    • B. 

      Move your trade balance from one that is unfavorable toward one that is favorable

    • C. 

      Maintain high levels of employment in your domestic firms that are facing brutal competition from foreign manufacturers

    • D. 

      All of the above

  • 85. 
    According to Mr. Lilly, import tariffs are generally  
    • A. 

      Good policy

    • B. 

      Bad policy

    • C. 

      Cannot be determined from the information given

  • 86. 
    According to Mr. Lilly, the main reason the U.S. currently has an import embargo in place against all products made in Cuba is that  
    • A. 

      The U.S. customs service has determined that products made in Cuba are generally of inferior quality.

    • B. 

      The U.S. customs service has determined that some agricultural products made in Cuba carry food-borne illnesses.

    • C. 

      The U.S. customs service has determined that some agricultural products made in Cuba carry dangerous plant pests that could easily spread to U.S. crops if imported

    • D. 

      we are still mad at them for the actions that led to the Cuban Missile Crisis in the early 1960s

  • 87. 
    The General Agreement on Tariffs and Trade (GATT) was first signed in  
    • A. 

      1938

    • B. 

      1948

    • C. 

      1958

    • D. 

      1968

  • 88. 
    The Uruguay Round of amendments to the GATT were ratified by the U.S. Congress in
    • A. 

      1974

    • B. 

      1984

    • C. 

      1994

    • D. 

      2004

  • 89. 
    The Uruguay Round of amendments to the GATT lowered import tariffs by an average of  
    • A. 

      8%

    • B. 

      18%

    • C. 

      28%

    • D. 

      38%

    • E. 

      48%

  • 90. 
    The World Trade Organization is headquartered in
    • A. 

      New York, New York

    • B. 

      Geneva, Switzerland

    • C. 

      Brussels, Belgium

    • D. 

      Antwerp, Belgium

    • E. 

      Paris, France

  • 91. 
    According to Mr. Lilly, _____ nations have now signed the GATT and thereby joined the WTO.
    • A. 

      104

    • B. 

      114

    • C. 

      124

    • D. 

      134

    • E. 

      144

  • 92. 
    According to Mr. Lilly, so far _____ nations have joined the European Union
    • A. 

      12

    • B. 

      15

    • C. 

      18

    • D. 

      24

    • E. 

      27

  • 93. 
    A free trade area has ______________ of the three elements of a common market.
    • A. 

      Just one

    • B. 

      Just two

    • C. 

      All three

  • 94. 
    The North American Free Trade Agreement (NAFTA) was signed in  
    • A. 

      1974

    • B. 

      1984

    • C. 

      1994

    • D. 

      2004

  • 95. 
    The laws we have written establish the standards of ________ behavior
    • A. 

      Ethical

    • B. 

      Legal

    • C. 

      Moral

    • D. 

      Socially responsible

  • 96. 
    Obeying the law is ________ ethical behavior
    • A. 

      Essentially the same as

    • B. 

      The first step towards

    • C. 

      The opposite of

    • D. 

      Unlikely to lead to

  • 97. 
    An ethical dilemma refers to a situation where you must:
    • A. 

      Treat someone unfairly.

    • B. 

      Choose between equally unsatisfactory alternatives

    • C. 

      Choose between a correct and an incorrect option

    • D. 

      Balance the concerns of profit and legality

  • 98. 
    Which of the following reflects the desire of an ethical manager to achieve a "win-win" relationship with others?
    • A. 

      Is it legal?

    • B. 

      Is it balanced?

    • C. 

      How will it make me feel about myself?

    • D. 

      How can I benefit at the expense of others?

  • 99. 
    Which of these questions can help us avoid a decision that would injure our self-esteem?
    • A. 

      Is it legal?

    • B. 

      Is it balanced?

    • C. 

      How will it make me feel about myself?

    • D. 

      How can I avoid taking the blame?

  • 100. 
    Which of the following describes the debate regarding Napster in the boxed material Making Ethical Decisions?
    • A. 

      Using the Internet, Napster enabled recording artists to distribute their music without using the traditional retail outlets

    • B. 

      As a nonprofit organization, Napster had an unfair advantage in the distribution of music

    • C. 

      By allowing users to download music for free, recording companies and artists believe that their property was stolen

    • D. 

      Napster created technology that allowed customers to evade security systems in most music stores

  • 101. 
    Ethical behavior will result in all of the following except:
    • A. 

      Greater trust and cooperation between employees and managers

    • B. 

      Balanced, fair agreements that create benefits for all involved

    • C. 

      Negative publicity from the news media

    • D. 

      Improved self-esteem

  • 102. 
    Establishing a formal code of ethics is:
    • A. 

      More common with small businesses than large businesses

    • B. 

      Unnecessary given the level of government regulation

    • C. 

      Growing in popularity

    • D. 

      Mandated by the Corporate and Criminal Fraud Accountability Act

  • 103. 
    Business relationships often present ethical dilemmas that are ________.
    • A. 

      Not easily resolved

    • B. 

      Easily resolved by following the relevant laws

    • C. 

      Best resolved by creating a lose-lose situation

    • D. 

      Irrelevant and therefore require no action

  • 104. 
    ________ refers to the standards of moral behavior
    • A. 

      Legality

    • B. 

      Responsibility

    • C. 

      Integrity

    • D. 

      Ethics

  • 105. 
    The first step when facing an ethical dilemma is to ask:
    • A. 

      "Is it legal"?

    • B. 

      "Is it balanced"?

    • C. 

      "How will it make me feel about myself"?

    • D. 

      "Is it ethical"?

  • 106. 
    Ethical behavior covers a ________ range of conduct than does legal behavior.
    • A. 

      Wider

    • B. 

      More limited

    • C. 

      Smaller

    • D. 

      Less demanding

  • 107. 
    Environmental quality is considered to be a public good. This means that:
    • A. 

      Ultimately it is the public that pays for environmental clean up.

    • B. 

      Businesses have a responsibility to minimize their environmental pollution.

    • C. 

      Everyone enjoys a cleaner environment regardless of who pays for it

    • D. 

      Society places a higher value on private goods and services

  • 108. 
    Which of the following terms describes someone who reports illegal or unethical behavior?
    • A. 

      Whistleblower

    • B. 

      Horn blower

    • C. 

      Watch tower sentinel

    • D. 

      Integrity watchdog

  • 109. 
    The difference between an organization's positive social contributions and its negative social impacts is called their:
    • A. 

      Social audit

    • B. 

      Responsibility impact report

    • C. 

      Net social contribution

    • D. 

      Community commitment level

  • 110. 
    The position a firm takes on issues that affect the corporation as well as society is known as its:
    • A. 

      Political philanthropy

    • B. 

      Corporate policy

    • C. 

      Target posturing

    • D. 

      Structural positioning

  • 111. 
    Corporate ________ encompasses various issues such as setting minority hiring practices, manufacturing safe products, and minimizing pollution.
    • A. 

      Responsibility

    • B. 

      Philanthropy

    • C. 

      Diversity

    • D. 

      Structure and strategy

  • 112. 
    One strategy guaranteed to displease your customers is to:
    • A. 

      Delight them with a quality product at a fair price

    • B. 

      Focus on cost and quality control systems within your organization

    • C. 

      Practice deception regarding product safety issues

    • D. 

      Shift the production of goods to foreign facilities and layoff U.S. workers

  • 113. 
    According to the boxed material entitled Reaching Beyond Our Borders, which of the following is true?
    • A. 

      Corporate ethics are intended to be consistent with cultural ethics

    • B. 

      Corporate ethics have priority over corporate profit

    • C. 

      Corporate profits have priority over corporate ethics

    • D. 

      Corporate ethics can clash with cultural ethics

  • 114. 
    Which of the following indicates that U.S. businesses are demanding socially responsible behavior from their international suppliers?
    • A. 

      The establishment of the Equal Opportunity Employment Commission

    • B. 

      The decision of Wal-Mart to open stores globally

    • C. 

      The decision of Sears to not import products made by Chinese prison labor

    • D. 

      The creation of the North American Free Trade Zone (NAFTA) between the U.S., Canada, and Mexico

  • 115. 
    Ethical problems and issues of social responsibility are:
    • A. 

      Unique to firms involved in global trade

    • B. 

      Unique to the United States

    • C. 

      Not unique to the United States

    • D. 

      Less important now than in the past

  • 116. 
    If a business fails in meeting its responsibilities to its employees, all of the following are likely to occur except:
    • A. 

      Reduced employee turnover

    • B. 

      Disgruntled workers manipulating budgets and expenses

    • C. 

      A loss of employee commitment and trust in the company and its management

    • D. 

      Employee retaliation by doing the minimum needed to get by

  • 117. 
    The legal case against Martha Stewart alleges that she:
    • A. 

      Used illegal immigrant labor

    • B. 

      Failed to establish a code of ethics for her firm

    • C. 

      Sold illegal drugs to undercover government officials

    • D. 

      Participated in insider trading

  • 118. 
    As a new employee, Vanessa has heard her boss say, "Do whatever it takes to meet your sales quota. However, anyone caught violating a law will be immediately fired". Vanessa recognizes this as a ________-based code of ethics.
    • A. 

      Internet

    • B. 

      Personal responsibility

    • C. 

      Compliance

    • D. 

      Integrity

  • 119. 
    According to Mr. Lilly, ethical lapses can not only harm the business's reputation, but the reputation of the individual employees as well, and negatively impact their future careers.
    • A. 

      True

    • B. 

      False

  • 120. 
    According to Mr. Lilly, pressure to meet sales, budget, or profit goals should be eliminated in business because its effect on unethical behavior in business is just too great.
    • A. 

      True

    • B. 

      False

  • 121. 
    According to your textbook's definition of "ethics," each person gets to decide for him or herself what is ethical behavior.
    • A. 

      True

    • B. 

      False

  • 122. 
    In Mr. Lilly's expressed opinion, people in the U.S. are much less ethical today than they were in say, 1950 or 1960.
    • A. 

      True

    • B. 

      False

  • 123. 
    Chimpanzees, binobos, and other pre-human hominids have been shown to use social coalitions to confront and sanction individual members of their groups who behave too selfishly.
    • A. 

      True

    • B. 

      False

  • 124. 
    According to Mr. Lilly, ethical lapses by managers within the once highly-reputable accounting firm Arthur Andersen in connection with the Enron scandal so damaged that firm's reputation that it was forced to go out of business.
    • A. 

      True

    • B. 

      False

  • 125. 
    In Mr. Lilly's expressed opinion, if fewer businesses and businesspeople in America behaved unethically in the future, that would be a very good thing.
    • A. 

      True

    • B. 

      False

  • 126. 
    The phenomenon of "moral muteness" refers specifically to the tendency for a business's top management to be silent with regard to what constitutes ethical behavior in business.  
    • A. 

      True

    • B. 

      False

  • 127. 
    According to Mr. Lilly, unethical behavior rarely produces a victim, and rarely damages your business's relationships with its stakeholders.  
    • A. 

      True

    • B. 

      False

  • 128. 
    According to Mr. Lilly, complaining about the behavior of others is part of a natural process through which we  
    • A. 

      Continually check and refine our consensus about what constitutes ethical behavior.

    • B. 

      Rally the support of others in sanctioning deviant individuals

    • C. 

      Both of the above

    • D. 

      Neither of the above

  • 129. 
    Ivan Boesky was arrested for insider trading during the  
    • A. 

      1960s

    • B. 

      1970s

    • C. 

      1980s

    • D. 

      1990s

  • 130. 
    According to Mr. Lilly, moral relativism is  
    • A. 

      The widespread and probably valid belief that ethics cannot be applied to business

    • B. 

      The widespread and probably valid belief that ethical rules in business are very different from those that govern our behavior in other contexts

    • C. 

      The widespread and probably valid belief that the faster the business environment changes, the more difficult it is to apply ethics to behavior in the business arena

    • D. 

      the belief that moral or ethical rules are derived from cultures, and are therefore somewhat arbitrary (since cultures differ around the world,) and that moral absolutes are rare or non-existent in the world.

  • 131. 
    The first item listed on Mr. Lilly's slide entitled "How Hard Should I Try to Ensure That I and My Employees Behave Ethically at Work" is  
    • A. 

      Harm to self-esteem

    • B. 

      Harm to relationships

    • C. 

      Civil and criminal penalties

    • D. 

      Damage to reputation

  • 132. 
    According to Mr. Lilly, we have a conscience because  
    • A. 

      We have been made in the image of God.

    • B. 

      It is an accidental bi-product of our large brain, which evolved mostly for other purposes

    • C. 

      It was bound to happen once we developed human language

    • D. 

      Cooperation and self-sacrifice have been essential to human survival for long enough to have been selected for by evolutionary forces.

  • 133. 
    The percentage of Americans expressing "a great deal of confidence in the leaders of major companies" reached an all-time low of 5% in  
    • A. 

      1985

    • B. 

      1991

    • C. 

      2002

    • D. 

      2007

  • 134. 
    According to Mr. Lilly, many psychologists and psychiatrists believe that if we behave unethically
    • A. 

      We do it for a very good reason

    • B. 

      It is because the benefits to us personally exceed the costs

    • C. 

      and if we do it often enough or severely enough, we will begin to undermine our own success unconsciously, as a way of ensuring that the world we live in punishes the wicked

    • D. 

      All of the above

    • E. 

      None of the above

  • 135. 
    According to Mr. Lilly, pressure to meet sales, budget, or profit goals was one of the factors contributing to the unethical behavior discovered at  
    • A. 

      Sea World in San Diego

    • B. 

      Cisco Systems in Mountain View

    • C. 

      Sears Auto Centers

    • D. 

      Kragen Auto Parts

  • 136. 
    Mr. Lilly thinks that people tend to be silent on the subject of ethics at work for  
    • A. 

      One reason: societal ambivalence about the role of ethics in business.

    • B. 

      Two reasons: societal ambivalence (see above) and moral relativism

    • C. 

      three reasons: societal ambivalence (see above,) moral relativism, and fear of being labeled a "goody two shoes"

    • D. 

      Four reasons: societal ambivalence (see above,) moral relativism, fear of being labeled a "goody two shoes," and the fact that higher profits can in fact be earned if a business is willing to be unethical

  • 137. 
    Eighty percent of General Dynamics employees surveyed in 1990 had favorable things to say about their company’s new ethics program
    • A. 

      True

    • B. 

      False

  • 138. 
    Mr. Lilly believes that showing sympathy or compassion for others is not compatible with business and exposes the businessperson who shows such feelings to a high likelihood of failure in business.
    • A. 

      True

    • B. 

      False

  • 139. 
    General Dynamics was caught doing illegal accounting and overcharging the U.S. government on some of its U.S. Navy contracts in about 1985.
    • A. 

      True

    • B. 

      False

  • 140. 
    According to your textbook, corporate social responsibility has ____ dimensions.
    • A. 

      2

    • B. 

      3

    • C. 

      4

    • D. 

      5

  • 141. 
    Corporate philanthropy  
    • A. 

      Is the giving of money, product, or time to charitable organizations

    • B. 

      Means having policies and practices in your day-to-day operations that are consistent with the golden rule

    • C. 

      Occurs when your company or its executives take a progressive, compassionate public position on one or more of the great issues of a day

  • 142. 
    According to the lecture, Ben & Jerry’s Ice Cream gives approximately _____ of their pre-tax profits to charity
    • A. 

      3.5%

    • B. 

      5.7%

    • C. 

      7.5%

    • D. 

      10%

  • 143. 
    Together, U.S. corporations gave approximately ______ to charity in 2006.
    • A. 

      $1 million

    • B. 

      $1 billion

    • C. 

      $4 billion

    • D. 

      $13 billion

  • 144. 
    According to the lecture, the Body Shop and Patagonia each give approximately _____ of their pre-tax profits to charity.  
    • A. 

      3.5%

    • B. 

      5.7%

    • C. 

      7.5%

    • D. 

      10%

  • 145. 
    Over the past 20 to 30 years, the number of U.S. companies that have a written ethics code has  
    • A. 

      Increased

    • B. 

      Decreased

    • C. 

      Stayed about the same

  • 146. 
    Interface, the world’s largest carpet tile manufacturer, is considered by some to be one of the most socially responsible companies due to its pioneering work
    • A. 

      With convicted criminals

    • B. 

      In reducing the impacts of its business on the environment.

    • C. 

      To improve the working conditions of factory workers in poor countries

    • D. 

      All of the above

  • 147. 
    A good example of a compliance-based ethics code is
    • A. 

      The one developed by General Dynamics in about 1986

    • B. 

      The one developed by Johnson & Johnson in 1943

    • C. 

      The one developed by Sears Roebuck & Company sometime after 1992

    • D. 

      All of the above

  • 148. 
    Ben & Jerry’s ice cream was started
    • A. 

      In 1977 in Vermont

    • B. 

      In 1982 in Oklahoma

    • C. 

      In 1987 in New York

    • D. 

      In 1992 in California

  • 149. 
    According to the lecture, Samsung Electronics gives approximately _____ of their pre-tax profits to charity.  
    • A. 

      3.5%

    • B. 

      5.7%

    • C. 

      7.5%

    • D. 

      10%

  • 150. 
    The golden rule is  
    • A. 

      He who has all the gold makes all the rules.

    • B. 

      A penny saved is a penny earned.

    • C. 

      Do unto others as you would have them do unto you.

    • D. 

      None of the above.

  • 151. 
    Delancey Street Restaurant, which hires ex-cons and tries to help them remain law-abiding citizens is located in  
    • A. 

      Decatur, Illinois

    • B. 

      Los Angeles, California

    • C. 

      San Francisco, California

    • D. 

      New York, New York

  • 152. 
    In 1999, Samsung Electronics’ socially responsible policies paid an unexpected dividend to the company’s owners and managers in  
    • A. 

      Virginia

    • B. 

      South Korea

    • C. 

      Indonesia

    • D. 

      France

  • 153. 
    Many studies have found that employees generally prefer working at companies that have ___________ ethics code.  
    • A. 

      A compliance-based

    • B. 

      An integrity-based

    • C. 

      An unwritten

  • 154. 
    According to your textbook, corporate responsibility  
    • A. 

      Is the giving of money, product, or time to charitable organizations

    • B. 

      Means having policies and practices in your day-to-day operations that are consistent with the golden rule

    • C. 

      Occurs when your company or its executives take a progressive, compassionate public position on one or more of the great issues of a day

  • 155. 
    In 2006, individuals in the U.S. gave approximately ______ as much to charity as corporations did
    • A. 

      One ninth

    • B. 

      One half

    • C. 

      Twice

    • D. 

      Nine times

  • 156. 
    About _____ of all written business ethics codes in the U.S. today are compliance-based
    • A. 

      10%

    • B. 

      25%

    • C. 

      50%

    • D. 

      75%