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ETS MFT BUSINESS EXAM – EXAM COMPLETE
300 QUESTIONS WITH DETAILED SOLUTIONS
JUST RELEASED THIS YEAR
ETS MFT BUSINESS EXAM – COMPREHESTUDY PRACTICE BANK
EXAM COVERAGE SUMMARY
This comprehensive review covers all core competencies assessed on the ETS Major Field Test in
Business: Accounting (financial accounting, managerial accounting, cost-volume-profit analysis,
budgeting, variance analysis, financial statement analysis, product costing, relevant cost
decision-making); Economics (microeconomics, macroeconomics, supply and demand, market
structures, fiscal and monetary policy, Keynesian framework, international
trade); Management (organizational behavior, leadership, motivation, teams, conflict,
negotiation, human resource management, organizational theory, organizational change and
development, operations management, quality/process management, supply chain logistics,
strategic management, entrepreneurship); Finance (corporate finance, capital budgeting, cost of
capital, capital structure, dividend policy, working capital management, international finance,
investments, risk and return, securities valuation, financial markets and
institutions); Marketing (strategic marketing, buyer behavior, segmentation, market research,
marketing mix, pricing, promotion, channels and distribution, global marketing); Quantitative
Business Analysis (decision-making models, statistical analysis, forecasting, quantitative
methods); Information Systems (enterprise resource planning, data mining, management
information systems); Legal and Social Environment (business law, contracts, torts, regulatory
environment, ethics and social responsibility); and International Issues (global business
environment, international finance, cultural considerations).
300 RANDOMIZED EXAM-STYLE QUESTIONS
Question 1: A company currently employs labor and capital such that the marginal product of
capital is twice the marginal product of labor. If the price of labor is $8.00 and the price of
capital is $4.00, what action should the firm take to reduce costs while producing the same
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output?
A) Substitute labor for capital
B) Substitute capital for labor
C) Decrease use of both inputs
D) Increase use of both inputs
E) Maintain current employment levels
Answer: B
Cost minimization requires MP_L/P_L = MP_K/P_K. Here MP_K = 2MP_L, so MP_K/P_K =
2MP_L/$4 = 0.5MP_L, while MP_L/P_L = MP_L/$8 = 0.125MP_L. Since capital gives more output
per dollar, substitute capital for labor.
Question 2: A company purchases inventory for $10,000 on account. How does this transaction
affect the accounting equation?
A) Assets increase, liabilities increase
B) Assets increase, equity increases
C) Assets decrease, liabilities decrease
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D) Assets decrease, equity decreases
E) No change to the accounting equation
Answer: A
Purchasing inventory on account increases assets (inventory) and increases liabilities (accounts
payable). The accounting equation (Assets = Liabilities + Equity) remains balanced.
Question 3: Which of the following is NOT part of the accounting process?
A) Identifying economic events
B) Recording financial transactions
C) Communicating financial information
D) Analyzing competitor strategies
E) Summarizing financial data
Answer: D
The accounting process involves identifying, recording, and communicating financial
information. Analyzing competitor strategies falls under strategic management and marketing,
not the core accounting process.
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Question 4: In marketing research, a firm might choose secondary data over primary data
because secondary data is:
A) More specific to the research question
B) Collected specifically for the current study
C) Generally less expensive and faster to obtain
D) Always more accurate than primary data
E) Not subject to copyright restrictions
Answer: C
Secondary data is existing data collected for other purposes; it is generally less expensive and
faster to obtain than primary data. However, it may not be as specific or current.
Question 5: Within the Keynesian framework, which of the following statements is true?
A) At a given income level, intended saving and intended investment may or may not be equal
B) Intended saving and intended investment are always equal at any income level
C) The marginal propensity to save is always equal to 1
D) Full-employment equilibrium is never achievable
E) Full-employment equilibrium always occurs in both short and long run
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SUCCESS!
ETS MFT BUSINESS EXAM – EXAM COMPLETE
300 QUESTIONS WITH DETAILED SOLUTIONS
JUST RELEASED THIS YEAR
ETS MFT BUSINESS EXAM – COMPREHESTUDY PRACTICE BANK
EXAM COVERAGE SUMMARY
This comprehensive review covers all core competencies assessed on the ETS Major Field Test in
Business: Accounting (financial accounting, managerial accounting, cost-volume-profit analysis,
budgeting, variance analysis, financial statement analysis, product costing, relevant cost
decision-making); Economics (microeconomics, macroeconomics, supply and demand, market
structures, fiscal and monetary policy, Keynesian framework, international
trade); Management (organizational behavior, leadership, motivation, teams, conflict,
negotiation, human resource management, organizational theory, organizational change and
development, operations management, quality/process management, supply chain logistics,
strategic management, entrepreneurship); Finance (corporate finance, capital budgeting, cost of
capital, capital structure, dividend policy, working capital management, international finance,
investments, risk and return, securities valuation, financial markets and
institutions); Marketing (strategic marketing, buyer behavior, segmentation, market research,
marketing mix, pricing, promotion, channels and distribution, global marketing); Quantitative
Business Analysis (decision-making models, statistical analysis, forecasting, quantitative
methods); Information Systems (enterprise resource planning, data mining, management
information systems); Legal and Social Environment (business law, contracts, torts, regulatory
environment, ethics and social responsibility); and International Issues (global business
environment, international finance, cultural considerations).
300 RANDOMIZED EXAM-STYLE QUESTIONS
Question 1: A company currently employs labor and capital such that the marginal product of
capital is twice the marginal product of labor. If the price of labor is $8.00 and the price of
capital is $4.00, what action should the firm take to reduce costs while producing the same
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output?
A) Substitute labor for capital
B) Substitute capital for labor
C) Decrease use of both inputs
D) Increase use of both inputs
E) Maintain current employment levels
Answer: B
Cost minimization requires MP_L/P_L = MP_K/P_K. Here MP_K = 2MP_L, so MP_K/P_K =
2MP_L/$4 = 0.5MP_L, while MP_L/P_L = MP_L/$8 = 0.125MP_L. Since capital gives more output
per dollar, substitute capital for labor.
Question 2: A company purchases inventory for $10,000 on account. How does this transaction
affect the accounting equation?
A) Assets increase, liabilities increase
B) Assets increase, equity increases
C) Assets decrease, liabilities decrease
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D) Assets decrease, equity decreases
E) No change to the accounting equation
Answer: A
Purchasing inventory on account increases assets (inventory) and increases liabilities (accounts
payable). The accounting equation (Assets = Liabilities + Equity) remains balanced.
Question 3: Which of the following is NOT part of the accounting process?
A) Identifying economic events
B) Recording financial transactions
C) Communicating financial information
D) Analyzing competitor strategies
E) Summarizing financial data
Answer: D
The accounting process involves identifying, recording, and communicating financial
information. Analyzing competitor strategies falls under strategic management and marketing,
not the core accounting process.
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Question 4: In marketing research, a firm might choose secondary data over primary data
because secondary data is:
A) More specific to the research question
B) Collected specifically for the current study
C) Generally less expensive and faster to obtain
D) Always more accurate than primary data
E) Not subject to copyright restrictions
Answer: C
Secondary data is existing data collected for other purposes; it is generally less expensive and
faster to obtain than primary data. However, it may not be as specific or current.
Question 5: Within the Keynesian framework, which of the following statements is true?
A) At a given income level, intended saving and intended investment may or may not be equal
B) Intended saving and intended investment are always equal at any income level
C) The marginal propensity to save is always equal to 1
D) Full-employment equilibrium is never achievable
E) Full-employment equilibrium always occurs in both short and long run
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