C201 BUSINESS ACUMEN EXAM SCRIPT 2025/2026
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔How did the Dodd-Frank Wall Street Reform and Consumer Protection Act impact
retailers? - ✔✔It capped the debit card swipe fee at 21 cents.
✔✔Which two activities are prohibited by insider trading laws and should be avoided by
a firm's employees? - ✔✔Buying stock in the public company for which the employee
works based on a conversation the employee overheard at a cocktail party between two
of the company's executives
Selling company stock because a co-worker told the employee the company's new drug
is failing in clinical trial
✔✔Which two risks does a firm face by funding the purchase of long-term assets with
short-term funding sources? - ✔✔Volatility of interest rates
Frequent renewals
✔✔Which funding source should a firm use if it wishes to secure long-term financing
while retaining all of its equity? - ✔✔Long-term commercial bank loan
✔✔Which three characteristics make commercial paper a low-risk, attractive source of
short-term funding for a business? - ✔✔It can make large amounts of money available.
It carries interest rates that are 1 to 2 percent less than bank loans.
It has a maturity that ranges between 1 and 270 days.
✔✔What should a firm do to manage the risk of using leverage when exploring long-
term funding options? - ✔✔Ensure that earnings remain larger than interest payments
✔✔Which financial statement should an investor examine to identify the liabilities of a
firm? - ✔✔The balance sheet
✔✔A company wishes to determine if it should fund a project with bonds or
equity.Which business concept would it most likely use to assist in the decision? -
✔✔Leverage
✔✔Which calculation determines a firm's return on equity? - ✔✔Net income divided by
average equity
✔✔Why should companies that are conservative investors with liquidity concerns invest
their excess cash in money market funds? - ✔✔It converts easily into cash.
✔✔Which regulatory relationship within the Securities and Exchange Commission
(SEC) historically has acted to prohibit the U.S. from adopting the International Financial
,Reporting Standards (IFRS)? - ✔✔FASB requires companies to comply with GAAP that
differ from IFRS
✔✔Which users of financial statements use the financial statements to evaluate
operations of the firm and to make investment decisions? - ✔✔Owners and creditors
✔✔What is considered the heart of any information system? - ✔✔Database
✔✔Which type of information system should be accessed by the vice president of sales
for a national department store chain who wants to see the previous day's sales
receipts? - ✔✔A transaction processing system
✔✔How does a virtual private network contribute to a firm's workforce productivity? -
✔✔Employees are enabled to work remotely with secure connectivity to the corporate
network via the internet.
✔✔What are three ways cloud computing services enhance company productivity? -
✔✔Through more efficient application updates
Through better resource utilization
Through greater application availability for remote workers
✔✔For which type of communication should employees have an ethical expectation of
privacy from company monitoring? - ✔✔Personal letters sent through the company mail
room
✔✔Which activity raises ethical issues heightened by the capabilities of data mining? -
✔✔Selling customer data for external marketing research
✔✔Which intent of spyware creates a company security issue? - ✔✔The intent to report
on a user's Internet activity
✔✔True or False: Macroeconomics is the study of small economic units such as
households and individual businesses. - ✔✔False
✔✔Which of the following is true of supply and demand curves? - ✔✔Movement along
the supply curve is the opposite of movement along the demand curve.
✔✔In which of the following market structures are there a large numbers of buyers and
sellers, each of whom has some significant control over price? - ✔✔Monopolistic
competition
, ✔✔A few industries in the United States, like transportation, energy, and
communications, were deregulated in the 1980s and 1990s to - ✔✔improve customer
service and reduce prices.
✔✔If labor hours increase, the amount of natural resources used remains the same,
and output remains constant, productivity is said to have: - ✔✔decreased.
✔✔Core inflation rate is the inflation rate of an economy after ______and______ prices
are removed. - ✔✔energy; food
✔✔_____ is formulated by the Federal Reserve System - ✔✔Monetary policy
✔✔A(n) _____ reduces the money supply to curb rising prices, overexpansion, and
concerns about overly rapid economic growth. - ✔✔restrictive monetary policy
✔✔What are the 4 stages of the business cycle? - ✔✔prosperity, recession, depression,
recovery
✔✔Total productivity = ________/_____________ - ✔✔output divided by input
✔✔What are the 4 types of unemployment? - ✔✔frictional, seasonal, structural, cyclical
✔✔The study of the choices people and governments make when allocating scarce
resources. - ✔✔Economics
✔✔situation in which total revenues raised by taxes equal the total proposed spending
for the year - ✔✔Balanced Budget
✔✔organization's plan for how it will raise and spend money during a given period of
time - ✔✔Budget
✔✔a situation in which the government spends more than it raises through taxes -
✔✔budget deficit
✔✔excess funding that occurs when government spends less than the amount of funds
raised through taxes and fees - ✔✔Budget Surplus
✔✔Economic System in which all property would be shared equally by the people of a
community under the direction of a strong central government - ✔✔Communism
✔✔measurement of the monthly average change in prices of goods and services -
✔✔Consumer Price Index (CPI)
QUESTIONS AND ANSWERS GUARANTEE A+
✔✔How did the Dodd-Frank Wall Street Reform and Consumer Protection Act impact
retailers? - ✔✔It capped the debit card swipe fee at 21 cents.
✔✔Which two activities are prohibited by insider trading laws and should be avoided by
a firm's employees? - ✔✔Buying stock in the public company for which the employee
works based on a conversation the employee overheard at a cocktail party between two
of the company's executives
Selling company stock because a co-worker told the employee the company's new drug
is failing in clinical trial
✔✔Which two risks does a firm face by funding the purchase of long-term assets with
short-term funding sources? - ✔✔Volatility of interest rates
Frequent renewals
✔✔Which funding source should a firm use if it wishes to secure long-term financing
while retaining all of its equity? - ✔✔Long-term commercial bank loan
✔✔Which three characteristics make commercial paper a low-risk, attractive source of
short-term funding for a business? - ✔✔It can make large amounts of money available.
It carries interest rates that are 1 to 2 percent less than bank loans.
It has a maturity that ranges between 1 and 270 days.
✔✔What should a firm do to manage the risk of using leverage when exploring long-
term funding options? - ✔✔Ensure that earnings remain larger than interest payments
✔✔Which financial statement should an investor examine to identify the liabilities of a
firm? - ✔✔The balance sheet
✔✔A company wishes to determine if it should fund a project with bonds or
equity.Which business concept would it most likely use to assist in the decision? -
✔✔Leverage
✔✔Which calculation determines a firm's return on equity? - ✔✔Net income divided by
average equity
✔✔Why should companies that are conservative investors with liquidity concerns invest
their excess cash in money market funds? - ✔✔It converts easily into cash.
✔✔Which regulatory relationship within the Securities and Exchange Commission
(SEC) historically has acted to prohibit the U.S. from adopting the International Financial
,Reporting Standards (IFRS)? - ✔✔FASB requires companies to comply with GAAP that
differ from IFRS
✔✔Which users of financial statements use the financial statements to evaluate
operations of the firm and to make investment decisions? - ✔✔Owners and creditors
✔✔What is considered the heart of any information system? - ✔✔Database
✔✔Which type of information system should be accessed by the vice president of sales
for a national department store chain who wants to see the previous day's sales
receipts? - ✔✔A transaction processing system
✔✔How does a virtual private network contribute to a firm's workforce productivity? -
✔✔Employees are enabled to work remotely with secure connectivity to the corporate
network via the internet.
✔✔What are three ways cloud computing services enhance company productivity? -
✔✔Through more efficient application updates
Through better resource utilization
Through greater application availability for remote workers
✔✔For which type of communication should employees have an ethical expectation of
privacy from company monitoring? - ✔✔Personal letters sent through the company mail
room
✔✔Which activity raises ethical issues heightened by the capabilities of data mining? -
✔✔Selling customer data for external marketing research
✔✔Which intent of spyware creates a company security issue? - ✔✔The intent to report
on a user's Internet activity
✔✔True or False: Macroeconomics is the study of small economic units such as
households and individual businesses. - ✔✔False
✔✔Which of the following is true of supply and demand curves? - ✔✔Movement along
the supply curve is the opposite of movement along the demand curve.
✔✔In which of the following market structures are there a large numbers of buyers and
sellers, each of whom has some significant control over price? - ✔✔Monopolistic
competition
, ✔✔A few industries in the United States, like transportation, energy, and
communications, were deregulated in the 1980s and 1990s to - ✔✔improve customer
service and reduce prices.
✔✔If labor hours increase, the amount of natural resources used remains the same,
and output remains constant, productivity is said to have: - ✔✔decreased.
✔✔Core inflation rate is the inflation rate of an economy after ______and______ prices
are removed. - ✔✔energy; food
✔✔_____ is formulated by the Federal Reserve System - ✔✔Monetary policy
✔✔A(n) _____ reduces the money supply to curb rising prices, overexpansion, and
concerns about overly rapid economic growth. - ✔✔restrictive monetary policy
✔✔What are the 4 stages of the business cycle? - ✔✔prosperity, recession, depression,
recovery
✔✔Total productivity = ________/_____________ - ✔✔output divided by input
✔✔What are the 4 types of unemployment? - ✔✔frictional, seasonal, structural, cyclical
✔✔The study of the choices people and governments make when allocating scarce
resources. - ✔✔Economics
✔✔situation in which total revenues raised by taxes equal the total proposed spending
for the year - ✔✔Balanced Budget
✔✔organization's plan for how it will raise and spend money during a given period of
time - ✔✔Budget
✔✔a situation in which the government spends more than it raises through taxes -
✔✔budget deficit
✔✔excess funding that occurs when government spends less than the amount of funds
raised through taxes and fees - ✔✔Budget Surplus
✔✔Economic System in which all property would be shared equally by the people of a
community under the direction of a strong central government - ✔✔Communism
✔✔measurement of the monthly average change in prices of goods and services -
✔✔Consumer Price Index (CPI)
