FBLA Test Prep UPDATED Exam Questions
and CORRECT Answers
A company must have fewer than 10 direct competitors to fit the definition of a small business
(T,F) - CORRECT ANSWER - False
In the United States, the majority of new jobs are created by large businesses (T,F) - CORRECT
ANSWER - False
Most of the significant technological advances that take place come from the research and
development efforts of large firms (T,F) - CORRECT ANSWER - False
Small businesses are important because they provide employment for a significant number of
employees (T,F) - CORRECT ANSWER - True
Small businesses in the whole sale sector seem to perform more poorly than large businesses
(T,F) - CORRECT ANSWER - False
With economy of scale, the cost of producing each unit decreases as the manufacturer produces a
greater number of units (T,F) - CORRECT ANSWER - True
Entrepreneurs find a niche for their product or service to ensure sufficient demand (T,F) -
CORRECT ANSWER - True
A small business has a great deal of control over its environment (T,F) - CORRECT
ANSWER - False
A niche segment of a market offers a new opportunity because it is not currently being satisfied
(T,F) - CORRECT ANSWER - True
, The preparation of a business plan is a means of developing a business on paper before actually
investing money and launching it (T,F) - CORRECT ANSWER - True
As soon as an individual decides to go into business, he or she should develop a business plan.
The first step when developing a business plan is to conduct a market survey. (T,F) - CORRECT
ANSWER - False
Market research is a key step in building a business plan (T,F) - CORRECT ANSWER - True
Bank loans are the most common source of financing for a small business (T,F) - CORRECT
ANSWER - False
A venture capitalist is an individual who tries to buy up small businesses similar to the way
corporate raiders buy large corporations (T,F) - CORRECT ANSWER - False
Small businesses have only limited success in large-scale manufacturing because they are unable
to compete on the basis of economy of scale (T,F) - CORRECT ANSWER - True
As defined by the U.S. Congress, the Small Business Administration's (SBA's) charter sets limits
on how much financial assistance the SBA can provide, while specifically prohibiting it from
giving advice to small businesses (T,F) - CORRECT ANSWER - False
The purpose of the SBA's SCORE program is to evaluate the managerial performance of small
businesses and then to assign scores that are used to determine the amount of loans that
individual businesses can obtain (T,F) - CORRECT ANSWER - False
Small businesses are not as successful as larger organizations in discovering new markets for a
product (T,F) - CORRECT ANSWER - True
The purpose of the SBA's ACE program is to identify the most promising businesses within
various industries to determine which companies are eligible for SBA investment (T,F) -
CORRECT ANSWER - False
and CORRECT Answers
A company must have fewer than 10 direct competitors to fit the definition of a small business
(T,F) - CORRECT ANSWER - False
In the United States, the majority of new jobs are created by large businesses (T,F) - CORRECT
ANSWER - False
Most of the significant technological advances that take place come from the research and
development efforts of large firms (T,F) - CORRECT ANSWER - False
Small businesses are important because they provide employment for a significant number of
employees (T,F) - CORRECT ANSWER - True
Small businesses in the whole sale sector seem to perform more poorly than large businesses
(T,F) - CORRECT ANSWER - False
With economy of scale, the cost of producing each unit decreases as the manufacturer produces a
greater number of units (T,F) - CORRECT ANSWER - True
Entrepreneurs find a niche for their product or service to ensure sufficient demand (T,F) -
CORRECT ANSWER - True
A small business has a great deal of control over its environment (T,F) - CORRECT
ANSWER - False
A niche segment of a market offers a new opportunity because it is not currently being satisfied
(T,F) - CORRECT ANSWER - True
, The preparation of a business plan is a means of developing a business on paper before actually
investing money and launching it (T,F) - CORRECT ANSWER - True
As soon as an individual decides to go into business, he or she should develop a business plan.
The first step when developing a business plan is to conduct a market survey. (T,F) - CORRECT
ANSWER - False
Market research is a key step in building a business plan (T,F) - CORRECT ANSWER - True
Bank loans are the most common source of financing for a small business (T,F) - CORRECT
ANSWER - False
A venture capitalist is an individual who tries to buy up small businesses similar to the way
corporate raiders buy large corporations (T,F) - CORRECT ANSWER - False
Small businesses have only limited success in large-scale manufacturing because they are unable
to compete on the basis of economy of scale (T,F) - CORRECT ANSWER - True
As defined by the U.S. Congress, the Small Business Administration's (SBA's) charter sets limits
on how much financial assistance the SBA can provide, while specifically prohibiting it from
giving advice to small businesses (T,F) - CORRECT ANSWER - False
The purpose of the SBA's SCORE program is to evaluate the managerial performance of small
businesses and then to assign scores that are used to determine the amount of loans that
individual businesses can obtain (T,F) - CORRECT ANSWER - False
Small businesses are not as successful as larger organizations in discovering new markets for a
product (T,F) - CORRECT ANSWER - True
The purpose of the SBA's ACE program is to identify the most promising businesses within
various industries to determine which companies are eligible for SBA investment (T,F) -
CORRECT ANSWER - False
