MULTIPLE CHOICE TASK FOR MID-TERM TEST (GENERAL BUSINESS)

1. Price is the amount of money given or asked for when goods and services are
bought or sold.
2. Supply is the amount of goods and services that producers will provide at various prices
3. Demand is the amount or quantity of goods and services that consumers are willing to
buy at various prices.
4. The equilibrium price is the point at which the quantity demanded and the quantity
supplied meet.
5. A command economy is an economic system in which a central authority makes the key
economic decisions.
6. A mixed economy is an economy that contains both private and public enterprises
7. The total value of the goods and services produced in a country in a given
year is called its gross domestic product (GDP).
8. The standard of living is the level of material comfort as measured by the goods and
services that are available.
9. Inflation is a general increase in the price of goods and services.
10. When the supply of goods is greater than demand, deflation can result.
11. When the government spends more on programs than it collects in taxes, the difference in
the amount is called a budget deficit.
12. The total amount of money a government owes is its national debt.
13. When a government’s revenue exceeds its expenditures during a one-year period, it has a
budget surplus
14. The rise and fall of economic activity over time is called the business cycle.
15. During a recession, economic activity slows down
16. Depression is a deep recession that affects the entire economy and lasts for several years.
17. A recovery is a rise in business activity after a recession or depression.
18. Ethics are moral principles by which people conduct themselves personally, socially, or
professionally.
19. Business ethics are rules based on moral principles about how businesses and
employees ought to conduct themselves.
20. Different cultures, businesses, and industries have different ethical standards.
21. Bribery occurs when gifts, money, or favors are offered to encourage a business deal.
22. A code of ethics is a set of guidelines for maintaining ethics in the workplace.
23. A sweatshop is a shop or factory in which workers are employed for long hours at low
wages and under unhealthy conditions
24. Unethical business practices include lying, offering merchandise known to be
substandard, or treating customers or employees unfairly.
25. A conflict of interest is a conflict between self-interest and professional obligation.
26. Social responsibility is the duty to do what is best for the good of society.
27. When companies restrict competition, consumers are affected.
28. Businesses have a social responsibility to provide employees with safe working
conditions, equal treatment, and fair pay.
29. One of the biggest social issues facing businesses today is environmental responsibility.
30. A virtual business or dot-com company is a business that operates on the Internet.
31. Online businesses have the potential to attract a huge number of customers.
32. A partnership is owned and run by two or more people
33. A business plan is a written description of a new business venture that describes all
aspects of the business.
34. A checklist is a good way to organize your thinking when you begin planning your own
business.
35. The executive summary is a brief account of the key points contained in a business plan.
36. A vision statement establishes the scope and purpose of a company and reflects its values
and beliefs.
37. A mission statement expresses the specific aspirations of a company, the major goals it
will try to reach
38. The operational plan includes the business processes that result in production and
delivery of the product or service.
39. Unlimited liability means the owner is responsible for the company’s debts.
40. Limited liability holds a firm’s owners responsible for no more than the capital that they
have invested in it.
41. A cooperative is an organization that is owned and operated by its members.
42. A franchise is a contractual agreement to use the name and sell the products or services of
a company in a designated geographic area.
43. A processor changes raw materials into more finished products.
44. An intermediary is a business that moves goods from one business to another. It buys
goods, stores them, and then resells them.
45. A retailer purchases goods from a wholesaler and sells them to consumers, the final
buyers of the goods.
46. Production is the process of creating, expanding, manufacturing, or improving goods and
services.
47. Procurement is the buying and reselling of goods that have already been produced.
48. Marketing is the process of planning, pricing, promoting, selling, and distributing ideas,
goods, and services.
49. Marketers make decisions based on market research of trends and consumer habits.
50. Management is the process of achieving company goals by planning, organizing, leading,
controlling, and evaluating the effective use of resources.
51. Finance is the business or art of money management.
52. A top-level manager is responsible for setting goals and planning for the future as well as
leading and controlling the work of others.
53. A middle manager carries out the decisions of top management.
54. Leadership means taking a company and its employees in a direction based upon a vision.
55. Initiative is the ability to act and make decisions without the help or advice of others.
56. Technology refers to the tools and machines that people have invented to make life
easier.
57. The e-workforce consists of people who work with computers while doing business.
58. The price at which one currency can buy another currency is called the exchange rate.
59. Protectionism is the practice of the government putting limits on foreign trade to protect
businesses at home.
60. A tariff is a tax placed on imports to increase their price in the domestic market.
61. A quota is a limit placed on the quantities of a product that can be imported.
62. An embargo is a ban on the import or export of a product.
63. Free trade occurs when there are few or no limits on trade between countries.
64. A monopoly occurs when a company controls an industry or is the only one to offer a
product or service.
65. An oligopoly occurs when a small number of companies control an industry.
66. A trust is a group of companies that band together to form a monopoly and cut out
competition.
67. A contract is a legally enforceable agreement between two or more parties. It can be
written, verbal, or even formed over a handshake.
68. Breach of contract occurs when one party fails to live up to the terms of a contract.
69. A patent is a legal grant for the sole right to own an invention.
70. A trademark is a name, a symbol, or a characteristic that identifies a product. It is also
registered with the government.