Business 5101 Praxis Practice Questions with Certified Solutions

Business 5101 Praxis Practice Questions with Certified Solutions Command Economy Govt. Controlling Prices & Production Security&Exchange Commission(SEC) responsibilities: Regulate securities, investigate insider trading, process applications for initial public offerings(IPO's) Product demand is directly influenced by: Customer's desire for product and ability to obtain product Sarbanes-Oxley Act of 2002 Fight corporate & accounting fraud Buyer's Market Product availability exceeds demand Maslow's hierarchy of needs Self actualization, esteem, safety NAFTA North American Free Trade Act (Only countries connected to North America are part: Canada, USA, Mexico) Debt Repayment History How well you payed stuff back (Directly influences consumer credit) World Trade Organization (WTO) Deals with claims of unfair protectionism by 1 country against another #1 factor that leads American companies to manufacture overseas: Lower Labor Costs Accounting equation for sole proprietorship: Assets=Liabilities+Owner's Equity Powerpoint Microsoft presentation program- great for presenting business plans, etc. Important tools for starting online business: Business model, website, email address Assets that can depreciate(lose value) over time Heavy equipment(bulldozer), computers, company vehicles These are deductible when itemizing on tax return: Mortgage interest, charitable donations, losses from theft Franchise Individual pays to enter into an agreement with a company to use the company's business model in certain area Par Value of a Bond Amount paid when the bond matures Freddie Mac (1970) was set up to: Expand opportunities for home ownership If US Federal Reserve sees risk of inflation they will: Raise interest rates Stagflation Combination of slow economic growth and high inflation Stock Dividends Usually taxable, offered voluntarily by companies to make their stock more attractive, may be discontinued or stopped at any time P/E ratio Comparison of price of stock vs. its ability to earn money per share (Price/Earnings) US Treasury Bonds Govt. bonds that offer safe investment Dow Jones Industrial Average Stock trading market for well known corporations with large market capital 1st step in planning to start small business Assess personal financial situation Net Exporter Value of goods exported by country exceeds value of goods imported by country Import tariff Fee country attaches to imported products to protect domestic products from foreign competition Credit score affects the following things: Buying a car, buying a home, getting a personal loan Comprehensive car insurance Covers damage done to insured's vehicle Oil price increases caused by: Increased global demand, speculation in oil market, not enough oil refinery capacity