Question 1

_____ occur when a corporation purchases some of its stock from the stockholders at the market price.

Accepted Answer

A)  Bond sales 
B)  Dividends 
C)  Stock buybacks 
D)  Profits 
A)  Bond sales 
B)  Dividends 
C)  Stock buybacks 
D)  Profits

Question 2

Bonds differ from bank loans in that bondholders:

Accepted Answer

A)  do not have an ownership claim on the corporation. 
B)  receive interest payments. 
C)  are paid before stockholders in the event of a bankruptcy. 
D)  may sell their bonds in the financial markets. 
A)  do not have an ownership claim on the corporation. 
B)  receive interest payments. 
C)  are paid before stockholders in the event of a bankruptcy. 
D)  may sell their bonds in the financial markets.

Question 3

Explain what happens when a currency appreciates and depreciates against the U.S. dollar.

Accepted Answer

When the Brazilian real appreciates agai

Question 4

_____ is the idea that firms have an obligation (duty) to support the community and environment in which they operate and not just to maximize profits.

Accepted Answer

A)  Customer service 
B)  Outsourcing 
C)  Corporate social responsibility 
D)  Employee volunteerism 
A)  Customer service 
B)  Outsourcing 
C)  Corporate social responsibility 
D)  Employee volunteerism

Question 5

ABC Corporation is a U.S company with a call center in India. This is a form of:

Accepted Answer

A)  diversification. 
B)  outsourcing. 
C)  insourcing. 
D)  increasing production. 
A)  diversification. 
B)  outsourcing. 
C)  insourcing. 
D)  increasing production.

Question 6

_____ are part of a stakeholder group impacted by corporate policy decisions.

Accepted Answer

A)  Stock exchanges 
B)  Foreign countries 
C)  Customers 
D)  People who live at least a thousand miles away 
A)  Stock exchanges 
B)  Foreign countries 
C)  Customers 
D)  People who live at least a thousand miles away

Question 7

Provide three examples of a firm's stakeholders, and describe how they are impacted by the firm's policy decisions.

Accepted Answer

Answers will vary as

Question 8

A U.S. automotive company purchases brake linings from a firm in Germany and promises to pay in euros in 30 days. Before the payment is made, the euro appreciates relative to the dollar, and the U.S. firm must pay more dollars than originally planned. This is an example of _____ risk.

Accepted Answer

A)  currency 
B)  foreign 
C)  domestic 
D)  country 
A)  currency 
B)  foreign 
C)  domestic 
D)  country

Question 9

Regarding corporate social responsibility, some advocates argue that it may actually benefit a firm's profits. What is this argument based on?

Accepted Answer

Corporate social responsibility may be i

Question 10

______ risk is the probability that the business environment in a foreign country may unexpectedly change.

Accepted Answer

A)  Currency 
B)  Foreign 
C)  Domestic 
D)  Country 
A)  Currency 
B)  Foreign 
C)  Domestic 
D)  Country

Question 11

Who noted that businesses often end up acting in society's best interests, even when pursuing the goal of reaping a profit?

Accepted Answer

A)  Ben Bernanke 
B)  Adam Smith 
C)  Benjamin Franklin 
D)  Alexander Hamilton 
A)  Ben Bernanke 
B)  Adam Smith 
C)  Benjamin Franklin 
D)  Alexander Hamilton

Question 12

A U.S. automotive company purchases brake linings from a firm in Germany and promises to pay in euros in 30 days. Before the payment is made, the euro appreciates relative to the dollar. The U.S. firm:

Accepted Answer

A)  is not affected. 
B)  will need fewer U.S. dollars. 
C)  will need more U.S. dollars. 
D)  will pay in U.S. dollars. 
A)  is not affected. 
B)  will need fewer U.S. dollars. 
C)  will need more U.S. dollars. 
D)  will pay in U.S. dollars.

Question 13

As a result of political unrests, a U.S. company is kicked out of another country and forced to leave behind all of its in-country assets. This is an example of _____ risk.

Accepted Answer

A)  currency 
B)  foreign 
C)  domestic 
D)  country 
A)  currency 
B)  foreign 
C)  domestic 
D)  country

Question 14

When a multinational company has assets and liabilities denominated in the same currency, _____ risk is reduced.

Accepted Answer

A)  diversification 
B)  currency 
C)  production capacity 
D)  country 
A)  diversification 
B)  currency 
C)  production capacity 
D)  country

Question 15

Explain both the business perspective and society's perspective regarding outsourcing.

Accepted Answer

From a business perspective, o

Exam 9: Organizing a Business

_____ occur when a corporation purchases some of its stock from the stockholders at the market price.

Bonds differ from bank loans in that bondholders:

Explain what happens when a currency appreciates and depreciates against the U.S. dollar.

_____ is the idea that firms have an obligation (duty) to support the community and environment in which they operate and not just to maximize profits.

ABC Corporation is a U.S company with a call center in India. This is a form of:

_____ are part of a stakeholder group impacted by corporate policy decisions.

Provide three examples of a firm's stakeholders, and describe how they are impacted by the firm's policy decisions.

A U.S. automotive company purchases brake linings from a firm in Germany and promises to pay in euros in 30 days. Before the payment is made, the euro appreciates relative to the dollar, and the U.S. firm must pay more dollars than originally planned. This is an example of _____ risk.

Regarding corporate social responsibility, some advocates argue that it may actually benefit a firm's profits. What is this argument based on?

______ risk is the probability that the business environment in a foreign country may unexpectedly change.

Who noted that businesses often end up acting in society's best interests, even when pursuing the goal of reaping a profit?

A U.S. automotive company purchases brake linings from a firm in Germany and promises to pay in euros in 30 days. Before the payment is made, the euro appreciates relative to the dollar. The U.S. firm:

As a result of political unrests, a U.S. company is kicked out of another country and forced to leave behind all of its in-country assets. This is an example of _____ risk.

When a multinational company has assets and liabilities denominated in the same currency, _____ risk is reduced.

Explain both the business perspective and society's perspective regarding outsourcing.

The Basics of Economics

Why We Trade

The Supply and Demand Model

Elasticity

Consumer Choice

The Economic Efficiency of Markets

Taxation: An Economic Analysis

Externalities, the Environment, and Public Goods

Stocks and Bonds

The Cost of Doing Business

Perfect Competition

Monopoly and Antitrust Laws

Monopolistic Competition and Price Discrimination

Oligopoly

Behavioral Economics and Strategy

Labor and Other Resources

The Distribution of Income

Information and Health Economics

GDP and the Price Level

Unemployment and the Business Cycle

Long Run Economic Growth

Saving, Investment, and the Federal Budget Deficit

The Monetary System

Money and the Price Level in the Long Run

Aggregate Supply and Aggregate Demand

Monetary Policy and Interest Rates

Fiscal Policy and the Business Cycle

The Aggregate Expenditure Model

Inflation Expectations and Stabilization Policies

International Trade

Foreign Exchange Markets

International Finance

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