Business Management Exam
questions and answers graded A+
Economic System - ANS✅✅A description of how a particular society distributes its resources to
produce goods and services
Communism - ANS✅✅First described by Karl Marx as a society in which the people, without
regard to class, own all the nation's resources
On paper it appears efficient, but in practice, these economies suffer from:
low standards of living
critical shortages of consumer goods
high prices
corruption and little freedom
Socialism - ANS✅✅An economic system in which the government owns and operates basic
industries but individuals own most businesses
Most socialist countries are democratic and recognize individual freedoms
The socialist system may allow a higher standard of living and is more stable; but taxes and
unemployment are generally higher in socialist countries
Capitalism/ Free Enterprise - ANS✅✅An economic system in which individuals own and operate
the majority of businesses that provide goods and services
Pure capitalism or free-market system happens when all economic decisions are made without
government intervention; also called laissez-faire capitalism
Modified capitalism differs from pure capitalism as the government intervenes and regulates
business to some extent
Supply - ANS✅✅The number of products businesses are willing to sell at different prices at a
specific time
Demand - ANS✅✅The number of products consumers are willing to buy at different prices at a
specific time
,Equilibrium Price - ANS✅✅the price at which the number of products supplied equals the amount
of products consumers are willing to buy at a specific time
Pure Competition - ANS✅✅The market structure that exists when there are many small businesses
selling one standardized product
Monopolistic Competition - ANS✅✅Fewer businesses than in a pure competition and the
differences among the goods they sell are small
Oligopoly - ANS✅✅The market structure that exists when there are very few businesses selling a
product
Monopoly - ANS✅✅The market structure that exists when there is only one business providing a
product in a given market
Gross Domestic Product (GDP) - ANS✅✅The sum of all goods and services produced in a country
during a year
Does not include profits from companies' overseas operations
Budget Defecit - ANS✅✅The condition in which a nation spends more than it takes in from taxes
U.S. budget deficit has recently grown to record levels; remedies include raising taxes or reduce
spending
Business Ethics - ANS✅✅Principles and standards that determine acceptable conduct in business
Social Responsibility - ANS✅✅A business's obligation to maximize its positive impact and minimize
its negative impact on society
a voluntary action taken on by companies to varying degrees and it characterized by actions showing
concern for all stakeholders such as employees, consumers, the environment and the community
Sarbanes-Oxley Act - ANS✅✅Criminalized securities fraud and stiffened penalties for corporate
fraud
, Enacted after the accounting scandals in the early 2000's
Dodd-Frank Act - ANS✅✅Passed to reform the financial industry and offer consumers protection
against complex and/or deceptive financial products
Enacted after the most recent recession
Ethical Issue - ANS✅✅An identifiable problem, situation, or opportunity that requires a person to
choose from among several actions that may be evaluated as right or wrong, ethical or unethical
Greenwashing - ANS✅✅(1) When a company claims they are green because they have a few green
practices such as recycling but not water or energy conservation
(2)When a company puts a façade on their products/services that looks and claims to be green,
when in fact there is nothing green about it
Whistleblowing - ANS✅✅The act of an employee exposing an employer's wrongdoing to outsiders,
such as the media or government regulatory agencies
Code of Ethics - ANS✅✅Formalized rules and standards that describe what a company expects of
its employees
Corporate Citizenship - ANS✅✅The extent to which businesses meet the legal, ethical, economic,
and voluntary responsibilities placed on them by their stakeholders
Social Responsibility Issues - ANS✅✅John F. Kennedy's 1962 Consumer Bill of Rights
The right to safety
The right to be informed
The right to choose
The right to be heard
Absolute Advantage - ANS✅✅A monopoly that exists when a country is the only source of an item,
the only producer of an item, or the most efficient producer of an item
questions and answers graded A+
Economic System - ANS✅✅A description of how a particular society distributes its resources to
produce goods and services
Communism - ANS✅✅First described by Karl Marx as a society in which the people, without
regard to class, own all the nation's resources
On paper it appears efficient, but in practice, these economies suffer from:
low standards of living
critical shortages of consumer goods
high prices
corruption and little freedom
Socialism - ANS✅✅An economic system in which the government owns and operates basic
industries but individuals own most businesses
Most socialist countries are democratic and recognize individual freedoms
The socialist system may allow a higher standard of living and is more stable; but taxes and
unemployment are generally higher in socialist countries
Capitalism/ Free Enterprise - ANS✅✅An economic system in which individuals own and operate
the majority of businesses that provide goods and services
Pure capitalism or free-market system happens when all economic decisions are made without
government intervention; also called laissez-faire capitalism
Modified capitalism differs from pure capitalism as the government intervenes and regulates
business to some extent
Supply - ANS✅✅The number of products businesses are willing to sell at different prices at a
specific time
Demand - ANS✅✅The number of products consumers are willing to buy at different prices at a
specific time
,Equilibrium Price - ANS✅✅the price at which the number of products supplied equals the amount
of products consumers are willing to buy at a specific time
Pure Competition - ANS✅✅The market structure that exists when there are many small businesses
selling one standardized product
Monopolistic Competition - ANS✅✅Fewer businesses than in a pure competition and the
differences among the goods they sell are small
Oligopoly - ANS✅✅The market structure that exists when there are very few businesses selling a
product
Monopoly - ANS✅✅The market structure that exists when there is only one business providing a
product in a given market
Gross Domestic Product (GDP) - ANS✅✅The sum of all goods and services produced in a country
during a year
Does not include profits from companies' overseas operations
Budget Defecit - ANS✅✅The condition in which a nation spends more than it takes in from taxes
U.S. budget deficit has recently grown to record levels; remedies include raising taxes or reduce
spending
Business Ethics - ANS✅✅Principles and standards that determine acceptable conduct in business
Social Responsibility - ANS✅✅A business's obligation to maximize its positive impact and minimize
its negative impact on society
a voluntary action taken on by companies to varying degrees and it characterized by actions showing
concern for all stakeholders such as employees, consumers, the environment and the community
Sarbanes-Oxley Act - ANS✅✅Criminalized securities fraud and stiffened penalties for corporate
fraud
, Enacted after the accounting scandals in the early 2000's
Dodd-Frank Act - ANS✅✅Passed to reform the financial industry and offer consumers protection
against complex and/or deceptive financial products
Enacted after the most recent recession
Ethical Issue - ANS✅✅An identifiable problem, situation, or opportunity that requires a person to
choose from among several actions that may be evaluated as right or wrong, ethical or unethical
Greenwashing - ANS✅✅(1) When a company claims they are green because they have a few green
practices such as recycling but not water or energy conservation
(2)When a company puts a façade on their products/services that looks and claims to be green,
when in fact there is nothing green about it
Whistleblowing - ANS✅✅The act of an employee exposing an employer's wrongdoing to outsiders,
such as the media or government regulatory agencies
Code of Ethics - ANS✅✅Formalized rules and standards that describe what a company expects of
its employees
Corporate Citizenship - ANS✅✅The extent to which businesses meet the legal, ethical, economic,
and voluntary responsibilities placed on them by their stakeholders
Social Responsibility Issues - ANS✅✅John F. Kennedy's 1962 Consumer Bill of Rights
The right to safety
The right to be informed
The right to choose
The right to be heard
Absolute Advantage - ANS✅✅A monopoly that exists when a country is the only source of an item,
the only producer of an item, or the most efficient producer of an item
