ETS Major Field Test (Practice Test):
Bachelor's Degree in Business
Questions and Answers
The common characteristic possessed by all assets is
a) Long life
b) Great monetary value
c) Tangible nature
d) Future economic benefit - Correct Answers -d) Future economic benefit
Which Foreign Direct Investment (FDI) attempts to acquire particular resources at a
lower real cost than could be obtained in the home country?
a) Market-seeking FDI
b) Efficiency-seeking FDI
c) Resource-seeking FDI
d) Strategic asset-seeking FDI - Correct Answers -c) Resource-seeking FDI
Under the Uniform Commercial Code (UCC) statute of frauds, which of the following
terms must be included in writing in order to satisfy the writing requirement?
a) The price of the goods.
b) The quantity of the goods.
c) The signatures and names of the buyer and the seller
d) The time and place for delivery - Correct Answers -b) The quantity of the goods
Which of the following is an appropriate Federal Reserve action to stimulate the United
States economy?
a) Selling government bonds on the open market
b) Increasing the discount rate
c) Reducing the reserve requirement
d) Cutting taxes - Correct Answers -c) Reducing the reserve requirement
The degree to which a product meets pre-established standards is known as
a) conformance
b) performance
c) reliability
d) none of the above - Correct Answers -a) conformance
,The control of the money supply by the Federal Reserve System is known as:
a) fiscal policy
b) supply-side policy
c) congressional policy
d) monetary policy - Correct Answers -d) monetary policy
On May 31, Company O's general ledger shows a cash balance of $5,123. The May 31
bank statement shows a balance of $4,905. Other information is available as follows:
1. A May 31 deposit of $300 does not appear on the bank statement; but a $3 service
charge does.
2. A customer's $40 insufficient funds check has been returned with the bank statement.
3. Outstanding checks of $10, $15, and $100 are identified on May
What is the correct cash balance on May 31?
a) $4,905
b) $5,080
c) $5,166
d) $5,204 - Correct Answers -b) $5,080
When using a flexible budget, a decrease in activity within the relevant range:
a) decreases variable cost per unit
b) decreases total costs
c) increases total fixed costs
d) increases variable cost per unit - Correct Answers -b) decreases total costs
Green desires to form a new company to manufacture lawn mowers. Green is
concerned about having his personal assets exposed to liability for the new company's
contracts and torts. Furthermore, he wants to retain control over the company's
operations and growth for the next few years. He will need an infusion of equity capital
to begin operations. He hopes to take the company public in about five years if it is
advantageous to do so at the time. Which of the following types of associations would
be best for Green's new company?
a) Corporation
b) General partnership
c) Limited partnership
d) Member-managed limited-liability company - Correct Answers -a) Corporation
,Keith is working on a computerized search through one of his company's massive data
files. The purpose of the search is to try to detect patterns in product sales. Keith is
engaged in:
a) data forecasting
b) marketing decision support systems
c) data mining
d) sales forecasting - Correct Answers -c) data mining
In the statement of cash flows, the section for cash flows from operating activities will
include which of the following?
a) Dividends paid
b) Issuance of common stock
c) A decrease in accounts payable
d) Purchase of a building financed entirely by a mortgage - Correct Answers -c) A
decrease in accounts payable
Which of the following is true with regard to an exculpatory clause?
a) An exculpatory clause excuses one party from liability for his/her own tortious
conduct.
b) Where one party has a superior bargaining position that has enabled him/her to
impose an exculpatory clause upon the other, the courts are inclined to nullify the
provision.
c) An exculpatory clause may be unenforceable for unconscionability.
d) All of the above are true - Correct Answers -d) All of the above are true
Managers at ABC, Inc. analyze the current situation of their organization and then
develop plans to help their organization to accomplish its mission and achieve its goals.
This is known as:
a) Synergy planning
b) Strategy formulation
c) Functional planning
d) SWOT analysis - Correct Answers -b) Strategy formulation
A group that develops naturally as a result of employees' interaction within an
organization is referred to as
a) an informal group
b) a formal group
c) a work-team group
d) a formation group - Correct Answers -a) an informal group
, When employees use email, word processors, electronic scheduling / calendars, they
are using which of the following?
a) Transaction processing systems
b) Process control systems
c) Office automation systems
d) Decision support systems - Correct Answers -c) Office automation systems
A standard procedure for numerically measuring a project's progress, forecasting its
completion date and cost and providing measures of schedule and budget variation as
activities are completed is referred to as
a) program evaluation and review technique (PERT)
b) the critical path method (CPM)
c) a Gantt chart
d) earned value analysis (EVA) - Correct Answers -d) earned value analysis (EVA)
High product differentiation is generally accompanied by
a) higher market share
b) decreased emphasis on competition based on price
c) higher profit margins and lower costs
d) significant economies of scale - Correct Answers -b) decreased emphasis on
competition based on price
The essence of common law is:
a) its prospective nature.
b) the concept of stare decisis
c) its flexibility
d) the plain meaning doctrine - Correct Answers -b) the concept of stare decisis
The Organization of the Petroleum Exporting Countries (OPEC) reduces production by
10 percent, and the growth rate of the world economy begins to escalate. How will the
simultaneous occurrence of these events affect the equilibrium price and quantity in the
world
petroleum market?
a) Price will increase, but quantity will remain unchanged
b) Price will increase, but quantity is indeterminate
c) Quantity will increase, but price is indeterminate
d) Both price and quantity will increase - Correct Answers -b) Price will increase, but
quantity is indeterminate
Within the context of the capital asset pricing model (CAPM), the risk measure known
as beta is often computed by regressing the return of the company's stock against the
Bachelor's Degree in Business
Questions and Answers
The common characteristic possessed by all assets is
a) Long life
b) Great monetary value
c) Tangible nature
d) Future economic benefit - Correct Answers -d) Future economic benefit
Which Foreign Direct Investment (FDI) attempts to acquire particular resources at a
lower real cost than could be obtained in the home country?
a) Market-seeking FDI
b) Efficiency-seeking FDI
c) Resource-seeking FDI
d) Strategic asset-seeking FDI - Correct Answers -c) Resource-seeking FDI
Under the Uniform Commercial Code (UCC) statute of frauds, which of the following
terms must be included in writing in order to satisfy the writing requirement?
a) The price of the goods.
b) The quantity of the goods.
c) The signatures and names of the buyer and the seller
d) The time and place for delivery - Correct Answers -b) The quantity of the goods
Which of the following is an appropriate Federal Reserve action to stimulate the United
States economy?
a) Selling government bonds on the open market
b) Increasing the discount rate
c) Reducing the reserve requirement
d) Cutting taxes - Correct Answers -c) Reducing the reserve requirement
The degree to which a product meets pre-established standards is known as
a) conformance
b) performance
c) reliability
d) none of the above - Correct Answers -a) conformance
,The control of the money supply by the Federal Reserve System is known as:
a) fiscal policy
b) supply-side policy
c) congressional policy
d) monetary policy - Correct Answers -d) monetary policy
On May 31, Company O's general ledger shows a cash balance of $5,123. The May 31
bank statement shows a balance of $4,905. Other information is available as follows:
1. A May 31 deposit of $300 does not appear on the bank statement; but a $3 service
charge does.
2. A customer's $40 insufficient funds check has been returned with the bank statement.
3. Outstanding checks of $10, $15, and $100 are identified on May
What is the correct cash balance on May 31?
a) $4,905
b) $5,080
c) $5,166
d) $5,204 - Correct Answers -b) $5,080
When using a flexible budget, a decrease in activity within the relevant range:
a) decreases variable cost per unit
b) decreases total costs
c) increases total fixed costs
d) increases variable cost per unit - Correct Answers -b) decreases total costs
Green desires to form a new company to manufacture lawn mowers. Green is
concerned about having his personal assets exposed to liability for the new company's
contracts and torts. Furthermore, he wants to retain control over the company's
operations and growth for the next few years. He will need an infusion of equity capital
to begin operations. He hopes to take the company public in about five years if it is
advantageous to do so at the time. Which of the following types of associations would
be best for Green's new company?
a) Corporation
b) General partnership
c) Limited partnership
d) Member-managed limited-liability company - Correct Answers -a) Corporation
,Keith is working on a computerized search through one of his company's massive data
files. The purpose of the search is to try to detect patterns in product sales. Keith is
engaged in:
a) data forecasting
b) marketing decision support systems
c) data mining
d) sales forecasting - Correct Answers -c) data mining
In the statement of cash flows, the section for cash flows from operating activities will
include which of the following?
a) Dividends paid
b) Issuance of common stock
c) A decrease in accounts payable
d) Purchase of a building financed entirely by a mortgage - Correct Answers -c) A
decrease in accounts payable
Which of the following is true with regard to an exculpatory clause?
a) An exculpatory clause excuses one party from liability for his/her own tortious
conduct.
b) Where one party has a superior bargaining position that has enabled him/her to
impose an exculpatory clause upon the other, the courts are inclined to nullify the
provision.
c) An exculpatory clause may be unenforceable for unconscionability.
d) All of the above are true - Correct Answers -d) All of the above are true
Managers at ABC, Inc. analyze the current situation of their organization and then
develop plans to help their organization to accomplish its mission and achieve its goals.
This is known as:
a) Synergy planning
b) Strategy formulation
c) Functional planning
d) SWOT analysis - Correct Answers -b) Strategy formulation
A group that develops naturally as a result of employees' interaction within an
organization is referred to as
a) an informal group
b) a formal group
c) a work-team group
d) a formation group - Correct Answers -a) an informal group
, When employees use email, word processors, electronic scheduling / calendars, they
are using which of the following?
a) Transaction processing systems
b) Process control systems
c) Office automation systems
d) Decision support systems - Correct Answers -c) Office automation systems
A standard procedure for numerically measuring a project's progress, forecasting its
completion date and cost and providing measures of schedule and budget variation as
activities are completed is referred to as
a) program evaluation and review technique (PERT)
b) the critical path method (CPM)
c) a Gantt chart
d) earned value analysis (EVA) - Correct Answers -d) earned value analysis (EVA)
High product differentiation is generally accompanied by
a) higher market share
b) decreased emphasis on competition based on price
c) higher profit margins and lower costs
d) significant economies of scale - Correct Answers -b) decreased emphasis on
competition based on price
The essence of common law is:
a) its prospective nature.
b) the concept of stare decisis
c) its flexibility
d) the plain meaning doctrine - Correct Answers -b) the concept of stare decisis
The Organization of the Petroleum Exporting Countries (OPEC) reduces production by
10 percent, and the growth rate of the world economy begins to escalate. How will the
simultaneous occurrence of these events affect the equilibrium price and quantity in the
world
petroleum market?
a) Price will increase, but quantity will remain unchanged
b) Price will increase, but quantity is indeterminate
c) Quantity will increase, but price is indeterminate
d) Both price and quantity will increase - Correct Answers -b) Price will increase, but
quantity is indeterminate
Within the context of the capital asset pricing model (CAPM), the risk measure known
as beta is often computed by regressing the return of the company's stock against the
