Exam 2: The Environment of Business

How might an economic environment characterized by moderate unemployment and low inflation affect a McDonald's restaurant?

Which of the following statements is correct? GNP refers to the total value of all goods and services produced by a national economy. GDP refers to the total value of all goods and services produced by a national economy regardless of where the factors of production are located. Growth depends on output increasing at a faster rate than population. Per capita GDP is calculated by dividing purchasing power parity by the rate of inflation. Real GDP compares how much a system produces with the resources needed to produce it.

What is the main measure of growth in an economy?

Which of the following is the best description of the balance of trade? The total of a nation's revenues from income taxes minus its expenditures on goods and services Changes in currency values and price changes The profitability of business firms that are exporting goods and services The total of a nation's exports minus its imports The total value of all services provided to foreigners during a one year time period

Sam, an audiologist, lost his job two years ago and still hasn't found work. There is just no market for audiologists at this time. Sam is experiencing structural unemployment. full unemployment. cyclical unemployment. bad luck. frictional unemployment.

When comparing GPI to GDP, it is correct to say that GPI is a better indicator of economic progress than GDP. GPI treats activities that harm our quality of life as costs and gives them negative values. GPI is a better measure of economic growth for advanced industrial countries, but GDP is a better measure for developing countries. the activities required to clean up an oil spill are not included in the calculation of GDP. none of these are correct.

Why is the political‒legal environment important to business?

List and discuss the 4 different types of unemployment, using examples to demonstrate the different types.

The most successful firms are getting leaner by focusing on their core competencies, but these new business models call for environmental management. unprecedented coordination. new corporate boundaries. unprecedented funds. none of these are correct

Which of the following best defines the term aggregate output? The total quantity and quality of goods and services that a country's citizens can purchase with the currency used in their economic system The measure of economic growth that compares how much a system produces with the resources needed to produce it The pattern of short-term ups and downs in an economy The total quantity of goods and services produced by an economic system during a given period The conditions of the economic system in which an organization operates

Agriculture efficiency has resulted in Canadians contributing more resources to farms. an increase in the number of people employed in the industry. Canadians needing more farms. a decrease in the number of people employed in the industry. none of these.

The advent of the iPod saw an increase in the downloading of music from the internet. Music artists are noticing a decrease in the sales of their CDs, which is an effect of which dimension of the external environment? Technological Economic Socio-cultural Political Global

Why is the socio-cultural environment important for business firms?

Which of the following best describes business process management? An approach by which firms move away from department-oriented organization and toward process-oriented team structures that cut across old departmental boundaries The strategy of paying suppliers and distributors to perform certain business processes or to provide needed materials and resources Any activity that adds value to some input by transforming it into an output for an internal or external customer The strategy of using the internet and word-of-mouth marketing to spread product information The strategy of owning the means by which an organization produces goods or services

How does inflation affect purchasing power?

In the past, only India's elite could afford to buy a car. But recent dramatic changes in India's economy have produced a growing middle class and rapidly rising incomes. Now, to meet the new demand, established automakers are introducing smaller, more affordable vehicles into India. But they will have to find a way to compete with India's Tata Motors, which has unveiled the least expensive car ever in this market, the Tata Nano. The Nano sells for only 100 000 rupees (about US $2,200) . It seats four passengers, gets 50 miles per gallon, and travels at a top speed of 60 miles per hour. Based on the information above, Tata most likely believed that as a result of recent changes in India's economy, what would be true of a growing number of Indian consumers? They had become even more cost-conscious than ever before. They would be willing and able to spend 100 000 rupees on a car. They would choose a vehicle with high fuel efficiency primarily because of concern about the natural environment. They will eventually prefer models similar to those currently available in the U.S. and Europe. They will place a higher value on car safety than fuel economy.

________ is the economic condition characterized by widespread increased prices throughout an economic system. Stability Deflation Unemployment Stagflation Inflation

List and describe the three factors that threaten stability.

What is outsourcing?

An acquisition takes place when two firms who previously have been buyer and seller merge. two firms join together to form a new entity. one firm consolidates with another. one firm simply buys another. management adopts a defence to make its firm less attractive.