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WRC 2008 Introduction to Business Answer Section

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					WRC 2008 Introduction to Business

Student Name:

True/False
Indicate whether the sentence or statement is true or false.

____    1. Successful businesses have adopted a marketing philosophy.
____    2. Most business plans are developed for one year and then updated for the next three years.
____    3. Keyboards, disk drives, and printers are commonly called software.
____    4. A person who owes money is a creditor.
____    5. Traveler's checks require the user to sign the check twice.
____    6. When you buy large quantities of merchandise and charge the purchase, you are using trade credit.
____    7. Being creditworthy means that you have good grades, drive safely, and have a part-time job.
____    8. A regular savings account usually requires a minimum balance of $300 or more.
____    9. An individual retirement account (IRA), a tax-deferred savings plan, allows a person to eliminate taxes on
           certain amounts saved.
____ 10. If your home or property is damaged and you are insured, the insurance company will pay all or a portion of
         the cost of repair or replacement.
____ 11. Success in your worker role has no effect on your standard of living.
____ 12. A manager has identity influence because of the position the manager holds in the organization.
____ 13. Examples of benefits include insurance, vacations, and paid parking.
____ 14. The first step in the management information system (MIS) process is to distribute reports to those who make
         decisions.
____ 15. Computers for use in marketing will result in U.S. businesses having little or no need to buy from or sell to
         foreign businesses.
____ 16. School libraries can be good sources of information on career planning.
____ 17. You should not restrict yourself to just one source of job leads even if the lead is an outstanding one.
____ 18. Retailers generally run three types of sales: promotional, clearance, and special-purchase.
____ 19. The Federal Trade Commission is one of the federal agencies that protects your right to be heard.
____ 20. Businesses usually make up losses that result from shoplifting by charging higher prices to everyone.
____ 21. Simple interest includes the total percentage cost of credit on a yearly basis.
____ 22. A savings account statement is prepared by a depositor to maintain a record of deposits and withdrawals.
____ 23. Commodity investing is usually considered to be fairly risky.
____ 24. Term insurance has cash value and an investment feature.
____ 25. Discretionary income is income you spend on things you want for pleasure, satisfaction, and comfort.
Multiple Choice
Identify the letter of the choice that best completes the statement or answers the question.

____ 26. A weekend skiing trip, a summer home at the lake, and a new 32-inch stereo television are all examples of
         ____.
         a. needs                                        c. resources
         b. wants                                        d. scarcity
____ 27. Rob has saved $1,000 to invest in summer lawn care business. This $1,000 is best referred to as ____.
         a. labor                                        c. capital
         b. goods                                        d. income
____ 28. Food, clothing, and housing are examples of ____.
         a. wants                                        c. capital
         b. needs                                        d. natural resources
____ 29. Productivity is affected by ____.
         a. technology and worker training
         b. the number of workers in the work force
         c. the wages paid to workers
         d. all of the above
____ 30. Goods that are very desirable and scarce have prices that tend to remain ____.
         a. high                                         c. competitive
         b. low                                          d. none of the above
____ 31. Prosperity is the condition when ____.
         a. businesses are beginning to lay off workers
         b. the business cycle is at its high point
         c. interest rates are low
         d. demand for goods and services is weak
____ 32. To be effective, promotion must ____.
         a. be noticed
         b. encourage consumers to pay attention to the message
         c. result in consumers taking action
         d. all of the above
____ 33. Reinforcing the purchase decision, or simply reminding customers that they have made the right choice, is a
         function of ____.
         a. product                                      c. promotion
         b. price                                        d. place
____ 34. Natural resources that cannot be replaced once they are used up are ____.
         a. renewable                                    c. replenished
         b. non-renewable                                d. none of the above
____ 35. When a business wants its workforce to reflect various groups in the community, it is concerned about ____.
         a. resources                                    c. safety
         b. diversity                                    d. none of the above
____ 36. Which of the following is used to completely stop the import or export of a product?
         a. embargo                                      c. duty
         b. tariff                                       d. tax
____ 37. Tariffs are levied to ____.
         a. protect defense industries
         b. to stop new industries from beginning
         c. protect foreign jobs
         d. none of the above
____ 38. Short-term financing includes ____.
         a. current operating activities                  c. land
         b. the cost of a building                        d. equipment
____ 39. Which of the following is not included in a successful business plan?
         a. Operations Plan                               c. Going out of Business Sale
         b. Marketing Plan                                d. Description of Competition
____ 40. Compensation is defined as ____.
         a. commissions and base incentives
         b. straight salary and commissions
         c. money paid to an employee for work performed
         d. profit sharing and piece rates
____ 41. The budget that describes the financial plan for the day-to-day operations of the business is called ____.
         a. a start-up budget                             c. a cash budget
         b. an operating budget                           d. a financial plan
____ 42. A computer system consists of an input device, a processing unit, an output mechanism, and ____.
         a. a computer language                           c. memory and storage facilities
         b. a network of multimedia devices               d. software
____ 43. A common output device is ____.
         a. a monitor                                     c. an optical scanner
         b. a mouse                                       d. a central processing unit
____ 44. Which of the following is not hardware?
         a. keyboard                                      c. printer
         b. mouse                                         d. spreadsheet program
____ 45. The final step in the management information system (MIS) process is to ____.
         a. update data files as needed
         b. distribute information reports to managers
         c. identify information needs of the organization
         d. obtain facts, figures, and other data
____ 46. Robots would most likely be used to work in ____.
         a. management jobs                               c. training centers
         b. dangerous situations                          d. the operation of motor vehicles
____ 47. Health concerns associated with computer use include ____.
         a. eyestrain                                     c. vision problems
         b. muscle tension                                d. all of the above
____ 48. Paying for college can be obtained through ____.
         a. financial aid                                 c. part-time work
         b. work-study programs                           d. all of the above
____ 49. Why do employers use position application forms?
         a. They desire standard information about all applicants.
         b. They do not trust the letters of application.
         c. They need something for their files.
         d. all of the above
____ 50. Which of the following would not be a type of question asked by the interviewer?
         a. personal                                      c. character
         b. general information                           d. stress
____ 51. How many small businesses have been started in recent years?
         a. 1,000,000                                     c. 500,000
         b. 800,000                                       d. 750,000
____ 52. Which organization sponsored by the SBA is especially for women business owners?
         a. Office of Women Business Owners                  c. Institute for Women
         b. Minority Enterprise                              d. Small Business Investment Companies
____ 53. An example of a store brand is ____.
         a. Craftsman                                        c. Sony
         b. Green Giant                                      d. Timex
____ 54. Overdrawing is ____.
         a. writing checks for cash
         b. writing checks for more than you have in your account
         c. writing checks on unauthorized forms
         d. writing checks using a date later than the date the check is written
____ 55. Check clearing may be done through a ____.
         a. bank                                             c. the Federal Reserve System
         b. clearinghouse                                    d. all of the above
____ 56. Checks that have been paid are called ____.
         a. postdated                                        c. canceled
         b. returned                                         d. overdrawn
____ 57. To obtain the best value for your financial services dollar ____.
         a. consider convenience only
         b. investigate and compare services offered
         c. do not consider fees and charges as they are all the same
         d. consider safety only
____ 58. When U-No Books purchased $300 worth of merchandise, they agreed to the terms 4/10, n/30. What was the
         total cost since the bill was paid in full in 30 days?
         a. $12                                              c. $300
         b. $288                                             d. $312
____ 59. Which of the following causes business owners to like bank credit cards?
         a. Banks determine whether the customer is a good risk.
         b. The bank assumes most of the trouble and expense of granting credit.
         c. Businesses get their money, less a fee, immediately.
         d. all of the above
____ 60. Which of the following persons can get a loan based on a promissory note?
         a. one who owns property
         b. one who gets a friend or relative as the cosigner
         c. one who has a good credit rating
         d. all of the above
____ 61. If $5,000 is borrowed at 9% for one half year, the amount of simple interest would be ____.
         a. $45                                              c. $450
         b. $225                                             d. $500
____ 62. Which of the following commonly borrow to build highways and schools and to provide other public
         services?
         a. consumers                                        c. governments
         b. businesses                                       d. foreign companies
____ 63. Low risk on savings usually means the investment has ____.
         a. no safety                                        c. low yield
         b. low liquidity                                    d. high yield
____ 64. A savings account statement presents ____.
         a. the names of new depositors
         b. a customer's record of recent deposits
         c. a summary of deposits, withdrawals, and interest earned
         d. a list of current interest rates paid on various savings accounts
____ 65. A money market account earns interest based on ____.
         a. current stock prices
         b. current interest rates
         c. federal income tax rates
         d. the number of withdrawals made during a three-month period
____ 66. If interest rates on similar bonds are higher than a certain bond's stated interest rate, the price
         of the particular bond will tend to ____.
         a. rise                                            c. change in an uncertain manner
         b. remain constant                                 d. decline
____ 67. The two most common types of brokers are ____.
         a. common and preferred
         b. profit and nonprofit brokers
         c. full-service and discount brokers
         d. bond and stock brokers
____ 68. How would you rate mutual funds for safety? liquidity? and rate of return?
         a. very good, very good, very good
         b. fair to good, good, fair to excellent
         c. excellent, good, fair to good
         d. fair, fair, fair to excellent
____ 69. Lung Jen is concerned about changing interest rates in the future. Which mortgage would be the best
         recommendation?
         a. adjustable rate                                 c. condominium
         b. fixed rate                                      d. equity
____ 70. The risk associated with illness, disability, loss of income, unemployment, old age, and premature death is
         ____.
         a. insurance                                       c. property risk
         b. liability risk                                  d. personal risk
____ 71. The risk of potential losses to others as a result of injury or damage you may have caused is ____.
         a. insurance                                       c. property risk
         b. liability risk                                  d. personal risk
____ 72. An amount you must pay before the insurance company pays a claim is ____.
         a. a premium                                       c. self-insurance
         b. a claim                                         d. a deductible
____ 73. Medical payments protection provides medical coverage for ____.
         a. policyholders while riding in their own car
         b. policyholders while riding in someone else's car
         c. guests riding in the insured's car
         d. all of the above
____ 74. Collision insurance covers ____.
         a. injuries to people other than the policyholder
         b. damage to the property of others
         c. injuries to the policyholder and the policyholder's family
         d. damage from a collision with another car or object
____ 75. If the insured had bodily injury liability coverage of 50/200 and had an accident for which the insured was
         found to be at fault, the insurance company would pay up to ____.
         a. $50,000 if just one person were injured
         b. $200,000 if just one person were injured
         c. $$250,000 if more than one person were injured
         d. none of the above
____ 76. Additional protection of property that covers damage caused by perils such as wind, hail, smoke, and falling
         aircraft, among other things, is ____.
         a. personal liability coverage                    c. homeowners policy
         b. standard fire policy                           d. extended coverage
____ 77. If your home is insured for $150,000 and the homeowners policy provides personal property coverage at 50
         percent, the coverage amount is ____.
         a. $25,000                                        c. $75,000
         b. $50, 000                                       d. none of the above
____ 78. Insurance which provides protection against the high costs of serious illnesses or injuries is ____.
         a. surgical insurance                             c. major medical insurance
         b. hospital insurance                             d. basic health insurance
____ 79. A health insurance delivery system that involves health care providers such as a group of physicians, a clinic,
         or a hospital contracting with an employer to provide medical services to employees is ____.
         a. surgical insurance
         b. a health maintenance organization
         c. major medical insurance
         d. a preferred provider organization
____ 80. When practicing comparison shopping you ____.
         a. compare products and prices                    c. always buy items at a discount
         b. always buy items on sale                       d. use discount coupons
____ 81. A specific plan for saving and spending income is ____.
         a. a fixed expense                                c. an allowance
         b. a variable expense                             d. a budget
____ 82. A report that summarizes current financial condition, acknowledges financial needs, and sets a direction for
         future financial activities is ____.
         a. an income statement                            c. a balance sheet
         b. a financial plan                               d. an owner's equity statement
____ 83. Which one of the following questions is important to ask before choosing a financial planner?
         a. Do you have a college degree?
         b. Are you married?
         c. What are the financial fees you charge?
         d. Do you like the work that you do?
____ 84. Which of the following is the best definition of profit?
         a. the money a business takes in from sales
         b. the money left from sales after expenses have been paid
         c. an operational device that makes business owners rich
         d. what is left after all merchandise has been sold
____ 85. To be effective, promotion must ____.
         a. be noticed
         b. encourage consumers to pay attention to the message
         c. result in consumers taking action
         d. all of the above
____ 86. Which of the following is true about employee wellness?
         a. Company-sponsored sports teams have public relations value only.
         b. Overweight workers are not an employer concern.
         c. Workers who have good health are valuable company assets.
         d. Smoking on the job is not a concern.
____ 87. The first step in developing a business plan is to ____.
         a. prepare financial information
         b. find money to finance the business
         c. develop a "game plan"
         d. gather and review information
____ 88. To maintain a home inventory or another list, a person would probably use which kind of software?
         a. spreadsheet                                    c. graphics
         b. word processing                                d. database
____ 89. Computer programs that help people solve technical problems are called ____.
         a. expert systems                                 c. multimedia systems
         b. SMART cards                                    d. robots
____ 90. What occurs when jobs go unfilled because qualified people are not willing to relocate?
         a. locational dilemma
         b. unemployment gridlock
         c. employment geographic mismatch
         d. locational unemployment
____ 91. The organization that settles accounts among different banks for checks being presented for payment is a
         ____.
         a. deposit-type financial institution
         b. nondeposit financial institution
         c. federal deposit insurance agency
         d. clearinghouse
____ 92. Which of the following is NOT a disadvantage of credit?
         a. careless buying                                c. overuse
         b. overbuying                                     d. savings
____ 93. Which of the following is true about a cosigner of a note?
         a. The cosigner is responsible for the payment of the note.
         b. The cosigner must be a friend or relative.
         c. The credit rating of the cosigner is unimportant.
         d. all of the above
____ 94. Which of the following can be used as credit references?
         a. banks where you have checking and/or savings accounts
         b. former employers
         c. other creditors where you have account balances
         d. all of the above
____ 95. Governments commonly borrow money ____.
         a. for building highways and schools and for providing other public services
         b. to pay for imported goods and services
         c. to cause changes in tax rates
         d. for expanding personal spending among consumers
____ 96. A regular savings account usually has ____.
         a. high risk                                      c. a high rate of return
         b. high liquidity                                 d. low liquidity
____ 97. A real estate agent is a professional trained to ____.
          a. assist people with buying or selling a home
          b. sell home and automobile insurance
          c. estimate the value of a home that is being considered
          d. determine the property tax on a home
____ 98. A speculative investment usually involves ____.
          a. an unusually high risk
          b. a guaranteed rate of return
          c. low risk
          d. securities issued by the federal government
____ 99. Insurance that replaces an item that has been destroyed is ____.
          a. personal property insurance
          b. real property insurance
          c. replacement insurance
          d. investment insurance
____ 100. Permanent insurance that extends over the lifetime of the insured is ____.
          a. whole life insurance                           c. level term insurance
          b. decreasing term insurance                      d. a renewable policy
WRC 2008 Introduction to Business
Answer Section

TRUE/FALSE

      1.   ANS:   T
      2.   ANS:   F
      3.   ANS:   F
      4.   ANS:   F
      5.   ANS:   T
      6.   ANS:   F
      7.   ANS:   F
      8.   ANS:   F
      9.   ANS:   F
     10.   ANS:   T
     11.   ANS:   F
     12.   ANS:   F
     13.   ANS:   T
     14.   ANS:   F
     15.   ANS:   F
     16.   ANS:   T
     17.   ANS:   T
     18.   ANS:   T
     19.   ANS:   T
     20.   ANS:   T
     21.   ANS:   F
     22.   ANS:   F
     23.   ANS:   T
     24.   ANS:   F
     25.   ANS:   T


MULTIPLE CHOICE

     26.   ANS:   B
     27.   ANS:   C
     28.   ANS:   B
     29.   ANS:   A
     30.   ANS:   A
     31.   ANS:   B
     32.   ANS:   D
     33.   ANS:   C
     34.   ANS:   B
     35.   ANS:   B
     36.   ANS:   A
     37.   ANS:   A
     38.   ANS:   A
39.   ANS:   C
40.   ANS:   C
41.   ANS:   B
42.   ANS:   C
43.   ANS:   A
44.   ANS:   D
45.   ANS:   A
46.   ANS:   B
47.   ANS:   D
48.   ANS:   D
49.   ANS:   A
50.   ANS:   A
51.   ANS:   B
52.   ANS:   A
53.   ANS:   A
54.   ANS:   B
55.   ANS:   D
56.   ANS:   C
57.   ANS:   B
58.   ANS:   C
59.   ANS:   D
60.   ANS:   A
61.   ANS:   B
62.   ANS:   C
63.   ANS:   C
64.   ANS:   C
65.   ANS:   B
66.   ANS:   D
67.   ANS:   C
68.   ANS:   B
69.   ANS:   B
70.   ANS:   D
71.   ANS:   B
72.   ANS:   D
73.   ANS:   D
74.   ANS:   D
75.   ANS:   A
76.   ANS:   D
77.   ANS:   C
78.   ANS:   C
79.   ANS:   D
80.   ANS:   A
81.   ANS:   D
82.   ANS:   B
83.   ANS:   C
84.   ANS:   B
 85.   ANS:   D
 86.   ANS:   C
 87.   ANS:   D
 88.   ANS:   D
 89.   ANS:   A
 90.   ANS:   D
 91.   ANS:   D
 92.   ANS:   D
 93.   ANS:   A
 94.   ANS:   D
 95.   ANS:   A
 96.   ANS:   B
 97.   ANS:   A
 98.   ANS:   A
 99.   ANS:   C
100.   ANS:   A

				
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