Math Expert
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QUESTION 1
1. For a given level of tax collections, prices, and interest rates, a decrease in government purchases will result in a(n)
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a. |
Increase in aggregate demand. |
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b. |
Decrease in aggregate demand. |
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c. |
Decrease in aggregate supply. |
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d. |
Increase in aggregate supply. |
5 points
QUESTION 2
1. Which of the following statements is correct if there is an increase in the resources available within an economy?
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a. |
The technological efficiency of the economy will improve. |
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b. |
The economy will be capable of producing more goods and services. |
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c. |
The standard of living in the economy will rise. |
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d. |
More goods and services will be produced in the economy. |
5 points
QUESTION 3
1. The trough of a business cycle is generally characterized by
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a. |
Shortages of essential raw materials and rising costs. |
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b. |
Rising costs and an unwillingness to risk new investments. |
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c. |
Unused productive capacity and an unwillingness to risk new investments. |
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d. |
Increasing purchasing power and increasing capital investments. |
5 points
QUESTION 4
1. Which of the following may provide a leading indicator of a future increase in gross domestic product?
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a. |
An increase in the average hours worked per week of production workers. |
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b. |
An increase in the timeliness of delivery by vendors. |
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c. |
A reduction in the money supply. |
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d. |
A decrease in the issuance of building permits. |
5 points
QUESTION 5
1. Which of the following actions is the acknowledged preventive measure for a period of deflation?
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a. |
Decreasing the money supply. |
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b. |
Decreasing interest rates. |
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c. |
Increasing the money supply. |
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d. |
Increasing interest rates. |
5 points
QUESTION 6
1. The discount rate of the Federal Reserve System is
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a. |
The rate that commercial banks charge for loans granted to the public. |
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b. |
The rate that the central bank charges for loans granted to commercial banks. |
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c. |
The ratio of excess reserves to legal reserves that are deposited in the central bank. |
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d. |
The specified percentage of a commercial bank’s deposit liabilities that must be deposited in the central bank. |
5 points
QUESTION 7
1. Platinum Co. has a receivable due in 30 days for 30,000 euros. The treasurer is concerned that the value of the euro relative to the dollar will drop before the payment is received. What should Platinum do to reduce the risk?
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a. |
Buy 30,000 euros now. |
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b. |
Enter into a forward contract to sell 30,000 euros in 30 days. |
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c. |
Platinum cannot effectively reduce this risk. |
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d. |
Enter into an interest rate swap contract for 30 days. |
5 points
QUESTION 8
1. A multinational company operates a production facility in country A and a distribution outlet in country B. The tax rates are 40% in country A and 50% in country B. The production facility sells the goods to the distribution outlet, both of which are wholly owned by the multinational company. The internal sale of goods occurs at a “transfer” price set by the multinational company. Assuming no nontax considerations and no interference from the tax authorities of the two countries, the company should
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a. |
Maximize the transfer price. |
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b. |
Minimize the transfer price. |
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c. |
Establish a transfer price that results in the same profit margin for both operations. |
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d. |
Use a transfer price based on the market price for the product that other producers charge. |
5 points
QUESTION 9
1. When analyzing a country’s balance of payments accounts, the
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a. |
"Current account" and "trade balances" are the same. |
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b. |
Country will be in financial jeopardy unless each component in the balance of payments accounts balances at the end of the year. |
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c. |
"Capital account" refers to the transactions related to the international movement of financial capital. |
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d. |
"Current account" refers only to merchandise exports and imports. |
5 points
QUESTION 10
1. Freely fluctuating exchange rates perform which of the following functions?
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a. |
They impose constraints on the domestic economy. |
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b. |
They automatically correct a lack of equilibrium in the balance of payments. |
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c. |
They make imports cheaper and exports more expensive. |
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d. |
They eliminate the need for foreign currency hedging. |
5 points
QUESTION 11
1. Which of the following is a direct effect of imposing a protective tariff on an imported product?
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a. |
Higher sales revenues for foreign producers of the item. |
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b. |
Lower domestic prices on the imported item. |
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c. |
Lower domestic consumption of the item. |
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d. |
Reduced domestic production of the item. |
5 points
QUESTION 12
1. Bigo, Inc., a U.S. entity, decided to build a production facility in Mexico. To finance construction, it borrows one million pesos from Banco Uno, a Mexican bank. Which of the parties is exposed to currency exchange risk?
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Bigo, Inc. |
Banco Uno |
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a. |
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b. |
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c. |
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d. |
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5 points
QUESTION 13
1. In which of the following circumstances, as the dollar changes against the foreign currency, would an investment in a foreign currency result in fewer dollars and a borrowing in a foreign currency cost more dollars?
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Investment in Foreign Currency |
Borrowing in Foreign Currency |
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a. |
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b. |
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c. |
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d. |
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5 points
QUESTION 14
1. Which of the following is not a kind of economic crisis that could be addressed by the International Monetary Fund?
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a. |
Currency crisis. |
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b. |
Banking crisis. |
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c. |
Debt crisis. |
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d. |
Balance of trade crisis. |
5 points
QUESTION 15
1. Which of the following most closely represents the U.S. share of worldwide GDP (output)?
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a. |
10%. |
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b. |
50%. |
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c. |
90%. |
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d. |
25%. |
5 points
QUESTION 16
1. Which one of the following countries is not one of the world's largest exporters of goods and services?
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a. |
U.S. |
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b. |
Mexico. |
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c. |
Germany. |
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d. |
China. |
5 points
QUESTION 17
1. DQZ Telecom is considering a project for the coming year that will cost $50,000,000. DQZ plans to use the following combination of debt and equity to finance the investment:
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Issue $15,000,000 of 20‐year bonds at a price of 101, with a coupon rate of 8%, and flotation costs of 1.5% of par. The after‐flotation cost yield is 8.08%. |
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Use $35,000,000 of funds generated from earnings. |
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The equity market is expected to earn 12%. U.S. Treasury bonds are currently yielding 5%. The beta coefficient for DQZ is estimated to be .60. DQZ is subject to an effective corporate income tax rate of 40%. |
2. The Capital Asset Pricing Model (CAPM) computes the expected return on a security by adding the risk‐free rate of return to the incremental yield of the expected market return, which is adjusted by the company’s beta. Compute DQZ’s expected rate of return on equity.
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a. |
7.2% |
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b. |
9.2% |
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c. |
12% |
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d. |
12.2% |
5 points
QUESTION 18
1. Assume that nominal interest rates just increased substantially but that the expected future dividends for a company over the long run were not affected. As a result of the increase in nominal interest rates, the company’s stock price should
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a. |
Stay constant. |
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b. |
Increase. |
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c. |
Decrease. |
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d. |
Change, but in no obvious direction. |
5 points
QUESTION 19
1. Which of the following describes an option?
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a. |
A contract that allows the holder to purchase a specified quantity of a financial instrument at a specified price. |
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b. |
An agreement to swap a stream of cash flows. |
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c. |
A standardized contract to take delivery of a specified quantity of a financial instrument in the future. |
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d. |
A negotiated contract to purchase a specified quantity of a financial instrument in the future. |
5 points
QUESTION 20
1. When an entity adopts a cost leadership strategy, which one of the following might it use to help carry out this strategy?
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Processing Efficiencies |
Outsourcing |
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a. |
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b. |
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ACC 576 WK 7 STUDY
A management accountant performed a linear regression of maintenance cost vs. production using a computer spreadsheet. The regression output shows an "intercept" value of $322,897.
How should the accountant interpret this information?
A. Y has a value of $322,897 when X equals zero.
B. X has a value of $322,897 when Y equals zero.
C. The residual error of the regression is $322,897.
D. Maintenance cost has an average value of $322,897
The equation for the graphic plot of a linear economic variable is D = b + m(a). Which of the following represents the value of the "intercept"?
A. D
B. b
C. m
D. a
Which of the following statements regarding the use of graphs to depict economic relationships is not correct?
A. When the dependent variable moves in the same manner or direction as the independent variable, then the relationship between the variables is positive.
B. When the dependent variable does not change as the independent variable changes, the relationship between the variables is neutral.
C. The plotted relationship between variables shown in graph form can be negative, as well as positive.
D. The vertical axis of an economic graph is referred to as the X axis.
Graphs are a means of depicting the relationship between two variables. These variables are usually identified as
A. positive and negative.
B. horizontal and vertical.
C. dependent and independent.
D. qualitative and quantitative.
The equation for the graphic plot of a linear economic variable is D = b + m(a), where m > 0. Which of the following is the slope of the economic "curve" represented by this equation?
A. Positive.
B. Negative.
C. Neutral.
D. Inverse.
Measures of the economic activity of an entire nation would be included in the study of
A. Microeconomics.
B. Macroeconomics.
C. International economics.
D. Governmental economics.
The free-market economy flow model depicts four major interrelated flows:
I . Individuals provide economic resources to business firms.
II. Firms provide payment to individuals for economic resources.
III. Firms provide goods and services to individuals.
IV. Individuals provide payment to firms for goods and services.
If the cost of imported oil declined suddenly and significantly, which one of the above flows would be most likely to be the first impacted?
A. I.
B. II.
C. III.
D. IV
The free-market economy flow model depicts four major interrelated flows:
I . Individuals provide economic resources to business firms.
II. Firms provide payment to individuals for economic resources.
III. Firms provide goods and services to individuals.
IV. Individuals provide payment to firms for goods and services.
If financial institutions and businesses suddenly and severely restrict the availability of consumer credit, which one of the above flows would be most likely to be the first to be impacted adversely?
A. I.
B. II.
C. III.
D. IV
Which of the following are considered economic resources?
Labor Capital Natural resources
Yes Yes Yes
Yes Yes No
Yes No No
No Yes Yes
In a free-market economy, which of the following should be the least significant factor in determining resource allocation and use?
A. Preferences of individuals.
B. Availability of economic resources.
C. Government regulation of commerce.
D. Level of technological development.
Which of the following is not a characteristic of a free-market economy?
A. Economic decisions are made by individual decision makers.
B. There is an interdependent relationship between individual consumers and business firms.
C. Economic resources are unlimited.
D. What gets produced depends on the preferences of end-use consumers.
The demand for a commodity would increase when the price of a
Substitute Commodity Complementary Commodity
Increases Increases
Increases Decreases
Decreases Increases
Decreases Decreases
When a demand schedule is plotted on a graph, the resulting demand curve will be
A. positively sloped.
B. negatively sloped.
C. completely vertical.
D. completely horizontal.
In the statement "quantity demanded is a function of price," are the variables quantity and price dependent or independent variables?
Quantity Price
Dependent Dependent
Dependent Independent
Independent Independent
Independent Dependent
The demand curve for a product reflects which of the following?
A. The impact of prices on the amount of product offered.
B. The willingness of producers to offer a product at alternative prices.
C. The impact that price has on the amount of a product purchased.
D. The impact that price has on the purchase amount of two related products.
If there is an increase in the income of market participants, which of the following is most likely to happen to the demand for normal goods?
A. The demand curve will shift inward.
B. The demand curve will shift outward.
C. This will lead to a movement down the existing demand curve.
D. This will lead to a movement up the existing demand curve.
Which one of the following would not cause an increase in demand for a commodity?
A. An increase in the number of consumers.
B. An increase in the price of a substitute commodity.
C. An increase in consumers' preference for the commodity.
D. A reduction in the price of the commodity.
Concurrent with a significant downturn in the economy, the sale of Scope's high-end electronics decreased dramatically. Which of the following is the most likely direct cause of the decline in demand for Scope's products?
A. Scope increased the price of the products.
B. Income of market participants decreased.
C. Scope reduced the price of its products.
D. Market participants' preferences for electronics changes
Which one of the following factors would not cause an increase in the supply curve of a commodity?
A. Improvements in related technology.
B. A decrease in the cost of production inputs.
C. An increase in the number of manufacturers of the commodity.
D. An increase in the price of the commodity.
A supply schedule (or supply curve) shows the relationship between the quantity of a commodity that will be supplied during a period of time and
A. the cost of input factors.
B. The level of technology.
C. The selling price of the commodity.
D. The demand for the commodity
If a change in market variables causes a supply curve to shift inward, which one of the following will occur?
A. The price at which the same quantity will be provided after the shift will be less than the price before the shift.
B. At a given price, a greater quantity will be provided after the shift than the quantity provided before the shift.
C. The supply curve after the shift will intercept the Y axis at a lower point than before the shift.
D. In order for the same quantity to be provided after the shift as was provided before the shift, price will have to increase.
When the cost of input factors to the production process increases, which one of the following will occur?
A. The demand curve will shift outward.
B. The supply curve will shift outward.
C. The demand curve will shift inward.
D. The supply curve will shift inward.
In the statement "quantity supplied is a function of price," are the variables quantity and price dependent or independent variables?
Quantity Price
Independent Independent
Independent Dependent
Dependent Independent
Dependent Dependent
An increase in taxes on cigarette production would cause which one of the following to occur?
A. The supply curve will shift outward.
B. The demand curve will shift outward.
C. The supply curve will shift inward.
D. The demand curve will shift inward.
What is the effect on the quantity of a commodity supplied relative to demand as a result of a government-mandated price ceiling or price floor?
Price Ceiling Price Floor
Quantity Shortage Quantity Shortage
Quantity Shortage Quantity Surplus
Quantity Surplus Quantity Shortage
Quantity Surplus Quantity Surplus
A city ordinance that establishes a price ceiling on rent may cause
A. the demand curve for rental space to shift to the left.
B. the supply curve for rental space to shift to the right.
C. the quantity of rental space demanded to exceed the quantity supplied.
D. the quantity of rental space supplied to exceed the quantity demanded
If both demand and supply have traditional curves, a higher equilibrium price may be caused by which one of the following?
A. A decrease in demand.
B. An increase in demand.
C. An increase in supply.
D. A production technology innovation.
If the price for a good is fixed by government fiat below market equilibrium price, which one of the following will occur?
A. Excess supply.
B. Demand shortage.
C. Excess demand.
D. Actual price will be greater than equilibrium price.
A price ceiling that is below the market equilibrium price would be expected to result in which one of the following sets of effects on demand and supply?
Supply Demand
Excess Shortage
Excess Excess
Shortage Shortage
Shortage Excess
Which of the following characteristics would indicate that an item sold would have a high price elasticity of demand?
A. The item has many similar substitutes.
B. The cost of the item is low compared to the total budget of the purchasers.
C. The item is considered a necessity.
D. Changes in the price of the item are regulated by governmental agency
An increase in the price of Commodity Y from $50 to $60 resulted in an increase in the quantity supplied, from 80 units to 88 units. Which one of the following is the price elasticity of supply?
A. + 2.
B. + 0.5.
C. - 2.
D. - 0.5.
A company has a policy of frequently cutting prices to increase sales. Product demand is significantly elastic. What impact would this have on the company's situation?
A. Quantity increases proportionally more than the price declines.
B. Quantity increases proportionally less than the price declines.
C. Price increases proportionally more than the quantity declines.
D. Price increases proportionally less than the quantity declines.
If demand for a product is elastic, what would be the effect of a price increase and a price decrease on total revenue (TR) generated?
Price Increase Price Decrease
TR Increase TR Increase
TR Increase TR Decrease
TR Decrease TR Increase
TR Decrease TR Decrease
In which of the following situations would there be inelastic demand?
A. A 5 percent price increase results in a 3 percent decrease in the quantity demanded.
B. A 4 percent price increase results in a 6 percent decrease in quantity demanded.
C. A 4 percent price increase results in a 4 percent decrease in quantity demanded.
D. A 3 percent price decrease results in a 5 percent increase in quantity demanded
The elasticity of demand is measured by
A. The change in quantity divided by the change in price.
B. The change in price divided by the change in quantity.
C. The percentage change in quantity divided by the percentage change in price.
D. The percentage change in price divided by the percentage change in quantity.
A 4% increase in the market price of Commodity X resulted in an 8% increase in the quantity of Commodity X supplied. Which one of the following statements is correct?
A. Supply is inelastic.
B. Supply is unitary.
C. Supply is elastic.
D. Supply is price neutral.
As an individual acquires (or consumes) more units of a commodity over a given time period, what is the effect on the individual's total utility and marginal utility?
Total Utility Marginal Utility
Decreases Decreases
Decreases Increases
Increases Decreases
Increases Increases
The following graph shows four curves: A-A, B-B, C-C, and D-D.
Which one of these curves could depict a total utility curve?
A. A-A.
B. B-B.
C. C-C.
D. D-D.
Allen buys only beer and pizza. When the price of beer is $2.00 per bottle and the price of pizza is $10.00, Allen maximizes his total utility (satisfaction) by buying 5 beers and 4 pizzas. If the marginal utility of the 5th beer is 100 utils, which one of the following would be the marginal utility of the 4th pizza?
A. 40 utils.
B. 100 utils.
C. 200 utils.
D. 500 utils.
The following graph shows four curves: A-A, B-B, C-C, and D-D.
Which of these curves depict variables that are not interdependent?
A-A B-B C-C D-D
Yes Yes Yes Yes
Yes No Yes No
No Yes No Yes
Yes Yes Yes No
Allen has the following schedule of marginal utility for slices of pizza and bottles of beer:
Slices of
Pizza Marginal
Utility Bottles of
Beer Marginal
Utility
1 100 1 60
2 80 2 50
3 60 3 30
4 50 4 20
If Allen maximizes his total utility by consuming 3 slices of pizza and 3 bottles of beer, which one of the following is the ratio of the price of a slice of pizza to the price of a bottle of beer?
A. 1:1
B. 1:2
C. 2:1
D. 2:2
Which one of the following cost curves does not have a general "U-shape"?
A. Average variable cost (AVC) curve.
B. Average fixed cost (AFC) curve.
C. Average total cost (ATC) curve.
D. Marginal cost (MC) curve.
In the long run, if all input factors to a production process are increased by 100%, but total output increases by only 75%, this indicates
A. Increasing returns to scale.
B. Constant returns to scale.
C. Decreasing returns to scale.
D. Diminishing returns.
Which one of the following statements regarding periods of analysis is correct?
A. Short-run analysis assumes that all inputs can be varied.
B. Long-run analysis assumes that all inputs can be varied.
C. Short-run analysis assumes that all inputs are fixed.
D. Long-run analysis assumes that all inputs are fixed.
According to the law of diminishing returns, which one of the following is correct?
A. The marginal product (output) falls as more units of a variable input are added to fixed inputs.
B. The marginal product (output) increases as more units of a variable input are added to fixed inputs.
C. The total product (output) falls as more units of a variable input are added to fixed inputs.
D. Marginal utility falls as more units of goods are consumed.
In a macroeconomic free-market flow model, which of the following would be considered leakages?
Savings Taxes
Yes Yes
Yes No
No Yes
No No
Which of the following forms of economic activity is considered in macroeconomics, but not in microeconomics?
A. Individuals providing economic resources to business entities.
B. Individuals paying taxes to the federal government.
C. Individuals paying business entities for goods/services.
D. Individuals receiving payments from business entities
In a macroeconomic free-market flow model, which one of the following would not be considered an "injection?"
A. Government spending.
B. Investment spending.
C. Government subsidies.
D. Imports.
Which of the following issues is least likely to be relevant to the study of macroeconomics?
A. Business cycles.
B. Aggregate supply.
C. Elasticity of demand.
D. Inflation and deflation
The foreign sector plays a role in a macroeconomic free-market flow model because of
imports exports
Yes Yes
Yes No
No Yes
No No
Which of the following sectors is most likely to be relevant in both microeconomic and macroeconomic models of free-market flows?
A. Business entities.
B. Governmental entities.
C. Financial entities.
D. Foreign entities
Potential GDP is a measure of an economy's ability to produce goods and services. Which of the following is assumed in estimating potential GDP?
A. Price levels are stable; there is no inflation or deflation.
B. Imports and exports are at equal amounts.
C. All labor is being fully and efficiently used.
D. Real GNP is equal to potential GNP.
Which of the following graphs shows the maximum combination of goods and services that can be produced at a given time, if all available resources are used efficiently?
A. Aggregate demand curve.
B. Aggregate supply curve.
C. Productive-possibility curve.
D. Indifference curve
A positive gross domestic product (GDP) gap exists when
A. Real GDP exceeds nominal GDP.
B. Nominal GDP exceeds real GDP.
C. Potential GDP exceeds real GDP.
D. Nominal GDP exceeds potential GDP
Gross domestic product (GDP) is a measure of
A. the market value of all goods and services exchanged in the U.S. economy during a year.
B. the market value of all final goods and services produced by U.S. entities worldwide during a year.
C. The market value of all final goods produced in the domestic economy during a year.
D. The market value of all final goods and services produced for exchange in the domestic economy during a year.
Adjustment from gross national product (GNP) to net national product (NNP) would require which one of the following?
A. Deducting depreciation from the GNP.
B. Deducting investment from the GNP.
C. Adding depreciation to GNP.
D. Adding investment to GNP
A good produced in 2008 that was in the finished goods inventory on December 31, 2008, and was sold in January 2009 would be included in whole or in part in the GDP of which year(s)?
2008 2009
Yes Yes
Yes No
No Yes
No No
The following information is available for economic activity for year 1:
In billions
Financial transactions $60
Second-hand sales 50
Consumption by households 40
Investment by businesses 30
Government purchases of goods and services 20
Net exports 10
What amount is the gross domestic product for year 1?
A. $210 billion.
B. $160 billion.
C. $100 billion.
D. $90 billion
Which of the following indicates that the economy is in a recessionary phase?
A. The rate of unemployment decreases.
B. The purchasing power of money declines.
C. Potential national income exceeds actual national income.
D. There is a shortage of essential raw materials and costs are rising.
If the U.S. economy is experiencing a 9% total unemployment rate and the natural rate of unemployment is 5.5%, which of the following is the cyclical rate of unemployment?
A. 0.0%.
B. 3.5%.
C. 5.5%.
D. 14.5%
Jason, 14 years old, has been working delivering newspapers for the past two years. Because he just entered high school, he has had to give up his newspaper delivery job. Although he has been seeking a new job, he has not been able to find one. Jason would be considered
frictionally unemployed structurally unemployed cyclically unemployed
Yes No No
No Yes No
No No Yes
No No No
There can be official full employment when there is which of the following kinds of unemployment?
I. Structural unemployment.
II. Frictional unemployment.
III. Seasonal unemployment.
A. Only I.
B. Only II.
C. Only III.
D. I, II, and III.
As a result of the recession in 2009 and the related decline in tourism, several thousand hospitality industry workers in Florida became unemployed. These workers were
A. frictionally unemployed.
B. structurally unemployed.
C. cyclically unemployed.
D. seasonally unemployed.
Which of the following changes in unemployment is most likely to be associated with a period of economic contraction?
A. Decrease in the cyclical unemployment rate.
B. Increase in the natural unemployment rate.
C. Increase in the cyclical unemployment rate.
D. Increase in the structural unemployment rate.
Which of the following types of unemployment typically results from technological advances?
A. Cyclical.
B. Frictional.
C. Structural.
D. Short-term.
Which of the following is not included in what is considered the natural rate of unemployment?
A. Cyclical unemployment.
B. Structural unemployment.
C. Frictional unemployment.
D. Seasonal unemployment
Which of the following is most likely to decrease aggregate demand?
A. Increased consumer spending.
B. Increased export revenues.
C. Increased business investment.
D. Increasing tax rates and tax revenues.
In macroeconomics, which one of the following would not be considered investment spending?
A. A family has a new home constructed.
B. A business acquires new production equipment.
C. An individual acquires shares of common stock.
D. A business acquires inventory to expand its product line.
During 2008, Roy's disposable income was $100,000 and he spent $90,000 on consumable goods. During 2009, Roy's disposable income increased to $200,000 and he spent $150,000 on consumable goods. For 2009, when compared to 2008, what is Roy's marginal propensity to consume?
A. .60.
B. .75.
C. .80.
D. $150,000.
An increase in spending on imported goods would most likely cause which one of the following?
A. Shift aggregate supply to the right.
B. Shift aggregate demand to the right.
C. Shift aggregate supply to the left.
D. Shift aggregate demand to the left.
Which of the following is most likely to result in an increase in aggregate demand in the U.S. economy?
A. An increase in taxes.
B. An increase in interest rates.
C. An increase in government spending.
D. An increase in imports.
Which of the following is most likely to increase aggregate demand?
A. Increased savings by consumers.
B. Increased spending on imported goods.
C. Increasing tax rates and tax revenues.
D. Increased business investment.
During 2008, Roy's disposable income was $100,000 and he spent $90,000 on consumable goods. During 2009, Roy's disposable income increased to $200,000 and he spent $150,000 on consumable goods. During 2009, what is Roy's average propensity to consume?
A. .75.
B. .80.
C. .90.
D. $150,000.
The full-employment gross domestic product is $1.3 trillion, and the actual gross domestic product is $1.2 trillion. The marginal propensity to consume is 0.8. When inflation is ignored, what increase in government expenditures is necessary to produce full employment?
A. $100 billion
B. $80 billion
C. $20 billion
D. $10 billion
Which of the following theoretical aggregate supply curves has a "kink" at the level of output at which there is full employment?
A. Classical supply curve.
B. Conventional supply curve.
C. Standard supply curve.
D. Keynesian supply curve
The war in Iraq substantially reduced the working population, as well as other economic resources, of that country. Which one of the following most likely occurred in the Iraqi economy as a result of the reduced working population?
A. The aggregate demand curve shifted outward.
B. The aggregate supply curve shifted outward.
C. The aggregate supply curve shifted inward.
D. The aggregate supply curve will remain unchanged.
Which of the following effects is most likely to accompany an unexpected reduction in aggregate supply, assuming a conventional supply curve?
A. An increase in the price level.
B. A decrease in the price level.
C. A decrease in the rate of unemployment.
D. An increase in the gross domestic product (GDP).
An increase in the minimum wage rate would likely result in which one of the following?
A. The aggregate supply curve would shift outward.
B. The aggregate supply curve would shift inward.
C. The aggregate supply curve would remain unchanged.
D. The quantity supplied at various prices will increase.
Assuming a conventional supply curve, which one of the following factors will not cause a shift in the aggregate supply curve for a good?
A. An increase in the availability of input resources.
B. Technological developments that increase production efficiency.
C. An increase in the selling price of the good.
D. A decrease in the cost of input resources.
An increase in the value of the Chinese currency (the RMB) relative to the U.S. dollar would most likely cause which of the following?
A. Increased aggregate demand in the U.S.
B. Increased aggregate supply in the U.S.
C. Increase aggregate demand in China.
D. Decrease aggregate supply in China
Assume increased capital investment results in higher levels of output of goods, but demand remains unchanged. What will be the likely effect on aggregate equilibrium quantity and price if a conventional supply curve is assumed?
Quantity Price
Increase Increase
Increase Decrease
Decrease Increase
Decrease Decrease
A rise in a country's exports would most likely cause which one of the following shifts?
A. The aggregate supply curve would shift outward.
B. The aggregate demand curve would shift outward.
C. The aggregate supply curve would shift inward.
D. The aggregate demand curve would shift inward
Assume increased capital investment results in higher levels of output of goods, but demand remains unchanged. What will be the likely effect on aggregate equilibrium quantity and price if a classical supply curve is assumed?
Quantity Price
Increase Increase
Increase Decrease
Decrease Increase
Decrease Decrease
Assume increased capital investment results in higher levels of output of goods, but demand remains unchanged. What will be the likely effect on aggregate equilibrium quantity and price if a Keynesian supply curve is assumed and the level of aggregate demand is at greater than full employment?
Quantity Price
Increase Increase
Increase Decrease
Decrease Increase
Decrease Decrease
The aggregate demand and aggregate supply curves intersect at a price and quantity that are
A. At (equal to) potential GDP.
B. Above potential GDP.
C. Below potential GDP.
D. Either at, above, or below potential GDP.
Which one of the following statements concerning the business cycle is correct?
A. A trough occurs at the start of a recessionary period.
B. A peak occurs at the end of a recessionary period.
C. A trough occurs at the end of an expansionary period.
D. A peak occurs at the end of an expansionary period
The business cycle in the U.S. is measured in terms of changes in
A. total government spending.
B. nominal GDP.
C. real GDP.
D. potential GDP.
Which of the following measures is most likely to indicate a forthcoming recessionary period?
A. Increasing levels of inventory relative to sales.
B. A decrease in weekly claims for unemployment.
C. A downturn in consumer expectations.
D. An increase in new building permits.
Which of the following segments of the economy will be least affected by the business cycle?
A. Commercial construction industry.
B. Machinery and equipment industry.
C. Residential construction industry.
D. Healthcare industry.
Which of the following statements concerning the business cycle, if any, is correct?
I. Business cycles recur with a consistent pattern of length and magnitude.
II. Business cycles impact individual industries at different times and with different degrees of severity.
A. I only is correct.
B. II only is correct.
C. Both I and II are correct.
D. Neither I nor II is correct.
Variations between business cycles are most likely attributable to which of the following factors?
A. The law of diminishing returns.
B. Comparative advantage.
C. Duration and intensity.
D. Opportunity costs.
Which of the following changes is most likely to be a lagging indicator of a change in the business cycle?
A. Change in building permits.
B. Change in consumer expectations.
C. Change in duration of unemployment
D. Change in weekly manufacturing hours.
Which of the following typically is not a reason for international economic activity by a U.S. entity?
A. Market diversification.
B. Resource acquisition.
C. Protection of domestic manufacturing capabilities.
D. Reduce production costs.
Which of the following typically is not a reason for international economic activity by a U.S. entity?
A. Market diversification.
B. Resource acquisition.
C. Protection of domestic manufacturing capabilities.
D. Reduce production costs.
Which one of the following concepts underlies the benefits of international economic activity (i.e., international trade)?
A. Absolute advantage.
B. Comparative advantage.
C. Absolute cost.
D. Potential GDP.
The concept of comparative advantage in international business activity is based on which one of the following?
A. Differences in relative absolute costs.
B. Law of diminishing returns.
C. Differences in relative opportunity costs.
D. Differences in relative cost of labor.
Which one of the following would not be an argument made by U.S. unions in favor of trade protectionism?
A. To protect start-up industries.
B. To protect strategic industries.
C. To increase imports.
D. To reduce unemployment.
In the long run, the imposition of an import quota on a commodity is likely to provide the greatest direct benefit to
A. domestic consumers of the commodity.
B. Domestic suppliers of the commodity.
C. Foreign consumers of the commodity.
D. Foreign suppliers of the commodity.
Which of the following is not an account used by the U.S. to account for transactions and balances with other nations (i.e., those not in the U.S. balance of payments statement)?
A. Current account.
B. Non-current account.
C. Capital account.
D. Financial account.
What is the effect when a foreign competitor's currency becomes weaker compared to the U.S. dollar?
A. The foreign company will have an advantage in the U.S. market.
B. The foreign company will be disadvantaged in the U.S. market.
C. The fluctuation in the foreign currency's exchange rate has no effect on the U.S. company's sales or cost of goods sold.
D. It is better for the U.S. company when the value of the dollar strengthens.
A statement expressed in the form of "1 euro = $1.20" expresses a/an
direct exchange rate indirect exchange rate
Yes Yes
Yes No
No Yes
No No
A company manufactures goods in Esland for sale to consumers in Woostland. Currently, the economy of Esland is booming and imports are rising rapidly.
Woostland is experiencing an economic recession and its imports are declining.
How will the Esland currency, $E, react with respect to the Woostland currency, $W?
A. The $E will remain constant with respect to the $W.
B. The $E will increase with respect to the $W.
C. The $E will decline with respect to the $W.
D. Changes in imports and exports will not affect currency changes.
A country's currency conversion value has recently changed from 1.5 to the U.S. dollar to 1.7 to the U.S. dollar. Which one of the following statements about the country is correct?
A. Its exports are less expensive for the United States.
B. Its currency has appreciated.
C. Its imports of U.S. goods are more affordable.
D. Its purchase of the U.S. dollar will cost less.
Freely fluctuating exchange rates perform which of the following functions?
A. They automatically correct a lack of equilibrium in the balance of payments.
B. They make imports cheaper and exports more expensive.
C. They impose constraints on the domestic economy.
D. They eliminate the need for foreign currency hedging.
Platinum Co. has a receivable due in 30 days for 30,000 euros. The treasurer is concerned that the value of the euro relative to the dollar will drop before the payment is received. What should Platinum do to reduce this risk?
A. Buy 30,000 euros now.
B. Enter into an interest rate swap contract for 30 days.
C. Enter into a forward contract to sell 30,000 euros in 30 days.
D. Platinum cannot effectively reduce this risk.
Assume a U.S. company purchases shares of a French company for 1,000,000 euros on March 1, 2003, when the exchange rate was 1 E = $1.10. The investment is classified as available-for-sale by the U.S. company. After holding the shares for eight months, it sold the entire investment in the foreign market for 1,200,000 euros when the exchange rate was 1 E = $1.23.What dollar amount of total investment gain or loss would the U.S. company recognize?
A. $ 26,000
B. $130,000
C. $156,000
D. $376,000
Assume a U.S. company purchases shares of a French company for 1,000,000 euros on March 1, 2003, when the exchange rate was 1 E = $1.10. The investment is classified as available-for-sale by the U.S. company. After holding the shares for eight months, it sold the entire investment in the foreign market for 1,200,000 euros when the exchange rate was 1 E = $1.23.
Which of the following type(s) of gain or loss would be recognized as a result of this investment in and subsequent sale of shares in the French company?
Investment
Gain or Loss Currency Exchange
Gain or Loss
Yes Yes
Yes No
No Yes
No No
A put is an option that gives its owner the right to do which of the following?
A. Sell a specific security at fixed conditions of price and time.
B. Sell a specific security at a fixed price for an indefinite time period.
C. Buy a specific security at fixed conditions of price and time.
D. Buy a specific security at a fixed price for an indefinite time period.
A domestic entity may be exposed to foreign currency exchange rate risk if it engages in which, if any, of the following kinds of transactions that are denominated in a foreign currency?
Import/Export Transactions Lending/Borrowing Transactions
Yes Yes
Yes No
No Yes
No No
Which of the following types of exchange risk derives from changes in currency exchange rates that alter the value of future transactions?
A. Translation exchange risk.
B. Economic exchange risk.
C. Transaction exchange risk.
D. Investment exchange risk.
CompCo., a U.S. computer maker, imported a supply of computer chips from ChipCo., a Japanese supplier, and agreed to pay ChipCo. in yen, with terms of net 90.
CompCo. is concerned that the dollar will weaken against the yen during the next three months and decides to hedge its liability.
Which one of the following contract transactions would CompCo. initiate to hedge its exchange rate risk?
A. Forward option contract to sell yen.
B. Forward exchange contract to sell yen.
C. Forward exchange contract to buy dollars.
D. Forward exchange contract to buy yen.
Which of the following is not a common basis for establishing a transfer price between affiliated entities?
A. Costs incurred by the selling affiliate.
B. Costs incurred by the buying affiliate.
C. Fair value based on the price in the market.
D. Price negotiated between affiliates
Which of the following examples involves transfer pricing?
A. Donating a product to a charitable organization.
B. Selling a product between affiliated entities.
C. Changing the price of a product to meet a competitor's price.
D. Transferring goods at a reduced price to customers for resale.
Globalco, a U.S. parent, has subsidiaries in Germany (Gerco) and in England (Engco). Gerco produces products that are sent to Engco for final assembly and packaging. Engo then sends the goods to Globalco for retail sales in the U.S. The effective income tax rates faced by each of the companies is:
Globalco 22%
Engco 18%
Gerco 20%
If the objective of transfer prices is to minimize income taxes, which of the following policies, within legally acceptable ranges, should Globalco adopt with respect to the transfer prices?
A. Minimize transfer price from Gerco to Engco and minimize transfer price from Engco to Globalco.
B. Maximize transfer price from Gerco to Engco and maximize transfer price from Engco to Globalco.
C. Minimize transfer price from Gerco to Engco and maximize transfer price from Engco to Globalco.
D. Maximize transfer price from Gerco to Engco and minimize transfer price from Engco to Globalco.
Which of the following statements regarding international transfer pricing is/are correct?
I. Firms with operations in multiple nations can manipulate earnings through transfer pricing.
II. The transfer price preferred by a foreign subsidiary manager may be different than the transfer price that maximizes consolidated profits.
A. Only I is correct.
B. Only II is correct.
C. Both I and II are correct.
D. Neither I nor II is correct.
Which of the following best describes "transfer pricing?"
A. The cost to convert financial statements from one country's currency to another country's currency.
B. The amount of sales denominated in a foreign currency.
C. The determination of the amounts at which transactions between affiliated entities will be recorded.
D. The amount of taxes paid on amounts earned in foreign countries.
Which of the following is not a kind of economic crisis that could be addressed by the International Monetary Fund?
A. Balance of trade crisis.
B. Currency crisis.
C. Banking crisis.
D. Debt crisis.
Foreign direct investment occurs when a domestic entity invests in
foreign bonds foreign production facilities
Yes Yes
Yes No
No Yes
No No
If a country with a developed economy faces a debt crisis that makes it unable to satisfy its foreign debt obligations, which of the following international organizations is most likely to be called upon to help resolve the debt crisis?
A. International Monetary Fund (IMF).
B. World Bank.
C. World Trade Organization (WTO).
D. United Nations (UN).
Which one of the following would not be a purpose of the General Agreement on Tariffs and Trade (GATT)?
A. Eliminating import quotas.
B. Harmonizing intellectual property laws.
C. Eliminating subsidies to export industries.
D. Establishing procedures for collection of international debt.
Which one of the following international organizations has the promotion of economic development through loans to developing countries as a primary purpose?
A. International Monetary Fund (IMF).
B. World Bank.
C. World Trade Organization (WTO).
D. United Nations (UN).
Which of the following enters into the determination of gross domestic product of a country?
Imports Exports
Yes Yes
Yes No
No Yes
No No
Which of the following countries is the world's largest exporter of goods/services?
A. China.
B. Germany.
C. Japan.
D. U.S.
The long-term trend in the dollar value of U.S. exports and imports reflects
Exports Imports
Increasing Increasing
Increasing Decreasing
Decreasing Increasing
Decreasing Decreasing
Which of the following statements regarding international trade is/are correct?
I. International trade has been facilitated by regional trade agreements.
II. International trade benefits both exporters and importers.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
Over the past 50 years, how has the share of total U.S. purchases and output represented by imports and exports, respectively, changed?
Imports as Share of Purchases Exports as Share of Output
Increased Increased
Increased Decreased
Decreased Increased
Decreased Decreased
Which of the following goods, if any, does the U.S. export more of than it imports (i.e., has net exports)?
I. Manufactured goods.
II. Industrial materials.
III. Agricultural goods.
A. I only.
B. II only.
C. III only.
D. Neither I, II, nor III.
Which of the following statements regarding international trade over the last 50 years is/are correct?
I. International trade accounts for an increasing share of worldwide economic activity.
II. International trade accounts for an increasing share of U.S. economic activity.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
International trade is measured by a country's
imports exports
Yes Yes
Yes No
No Yes
No No
Which of the following is least likely to be a risk encountered when goods are outsourced to a foreign supplier and payment is denominated in the foreign supplier's currency?
A. Quality risk.
B. Security risk.
C. Market risk.
D. Currency exchange risk.
Outsourcing may involve the acquisition of
goods services
Yes Yes
Yes No
No Yes
No No
Which of the following, if either, would serve to mitigate risks associated with outsourcing?
I. Negotiate for payment to the foreign supplier be made in the foreign currency.
II. Include an arbitration clause in the contract with the foreign supplier.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
Outco, Inc., a U.S. firm, has a contract to acquire spare parts from a foreign supplier. The contract provides that the parts are to be manufactured to Outco's specifications and Outco is to pay in U.S. dollars. Which of the following risks will Outco encounter as a direct result of the contract?
Currency Exchange Risk Quality Risk
Yes Yes
Yes No
No Yes
No No
Outsourcing of goods may involve acquisition of
raw materials final goods
Yes Yes
Yes No
No Yes
No No
Which of the following, if either, may be a reason a firm elects to outsource production of a subassembly used in its final product?
I. To Improve quality of subassembly.
II. To reduce the time needed to have the subassembly available.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
Which of the following statements regarding the Eurodollar market, if either, is/are correct?
I. Eurodollars can be either EEU Euros or U.S. dollars.
II. The Eurodollar market provides long-term loans.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II
The currency or currencies of the Eurodollar market (Euromarket) include(s):
U.S. Dollar EEU Euro
Yes Yes
Yes No
No Yes
No No
Bigo, Inc., a U.S. entity, decided to build a production facility in Mexico. To finance construction, it borrows one million pesos from Banco Uno, a Mexican bank. Which of the parties is exposed to currency exchange risk?
Bigo, Inc. Banco Uno
Yes Yes
Yes No
No Yes
No No
Capital markets facilitate the trading of
stocks bonds
Yes Yes
Yes No
No Yes
No No
In which of the following circumstances, as the dollar changes against the foreign currency, would an investment in a foreign currency result in fewer dollars and a borrowing in a foreign currency cost more dollars?
Investment in Foreign Currency Borrowing in Foreign Currency
Dollar weakens Dollar weakens
Dollar weakens Dollar strengthens
Dollar strengthens Dollar weakens
Dollar strengthens Dollar strengthens
Which of the following statements regarding globalization of capital markets, if either, is/are correct?
I. Globalization permits reduced investment portfolio risk.
II. Globalization permits a lower cost of capital.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II
Parco, Inc., a U.S. entity, has a 100% owned subsidiary, Subco, Inc., located in the country of Eastlaco. In which one of the following arrangements would there be no foreign currency exchange risk associated with borrowing by either Parco or its subsidiary, Subco, prior to consolidation?
A. Parco borrows in the currency of Eastlaco.
B. Subco borrows in the U.S. dollar.
C. Subco borrows in the currency of Eastlaco.
D. Parco borrows in the currency of a third country.
Which one of the following sets identifies the two countries that are most likely the world's largest export countries?
A. U.S. and Japan.
B. China and Japan.
C. Germany and China.
D. U.S. and China.
In which of the following geographical areas has the greatest decline in share of worldwide output occurred over the past 40 years?
A. U.S.A
B. Europe.
C. Latin America.
D. Asia.
Which one of the following is most likely the U.S. share of worldwide exports?
A. 50%.
B. 15%.
C. 10%.
D. 2%.
Which of the following most closely represents the U.S. share of worldwide GDP (output)?
A. 90%.
B. 50%.
C. 25%.
D. 10%.
Which one of the following countries is not one of the world's largest exporters of goods and services?
A. Germany.
B. Mexico.
C. U.S.
D. China.
In which of the following geographical areas has the greatest increase in share of worldwide output occurred over the past 30 years?
A. U.S.
B. Europe.
C. Asia.
D. Africa/Middle East.
Which of the following is the most elementary form of international business?
A. Foreign franchising.
B. Foreign joint venturing.
C. Importing.
D. Foreign licensing.
Which one of the following is least likely an advantage associated with the acquisition of a pre-existing foreign entity?
A. It may block competition from entering the foreign market in which the acquired entity operates.
B. Provides quicker entry into a market than developing a new entity in the foreign market.
C. Assures synergies between the acquiring entity and the acquired entity.
D. Provides historical financial information that is useful to the acquiring entity.
Which of the following statements regarding foreign licensing and foreign franchising, if any, is/are correct?
I. Licensors typically remain more involved with a licensee than a franchisor remains involved with a franchisee.
II. Franchising typically provides greater quality control than does simple licensing.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
Which one of the following is least likely an advantage associated with a wholly owned foreign subsidiary?
A. Protection of proprietary information.
B. Ability to coordinate activities of the subsidiary with other activities.
C. Ability to maintain quality control.
D. Minimizes capital investment required.
Government-imposed trade barriers may restrict
imports exports
Yes Yes
Yes No
No Yes
No No
Which of the following statements regarding importing and exporting, if any, is/are correct?
I. Goods with a low value-to-weight ratio are less likely to be suitable for importing than goods with a high value-to-weight ratio.
II. In the exporting of goods, one may encounter import restrictions imposed by the country of destination.
A. I only.
B. II only.
C. Both I and II.
D. Neither I nor II.
Which one of the following forms of international business is most likely to give an entity the greatest control over an international business activity?
A. Foreign joint venture.
B. Foreign licensing agreement.
C. Foreign franchising agreement.
D. Foreign subsidiary
The measurement of post-performance characteristics is most likely to be associated with which one of the following activities of the strategic planning process?
A. Environmental analysis.
B. Evaluation and control.
C. Formulating strategy.
D. Establishing objectives.
Which of the following activities is most likely to be the first step in the strategic planning process?
A. Establishing objectives.
B. Formulating strategy.
C. Formulating mission statement.
D. Conducting environmental analysis.
Which of the following is not a generic strategy identified by Michael Porter?
A. Focus.
B. Cost leadership.
C. First-to-market.
D. Differentiation.
Which of the following identifies a framework for gauging the attractiveness of the competitive environment of an industry?
A. Five forces.
B. SWOT.
C. PEST.
D. Focus.
Which of the following factors is explicitly included in PESTEL analysis but is not explicitly in PEST analysis?
A. Economic growth rate.
B. Level of research and development.
C. Political stability.
D. Climate conditions.
PEST is an acronym for
A. Political, Environmental, Social, and Technological.
B. Policy, Environmental, Social, and Technological.
C. Political, Economic, Social, and Technological.
D. Policy, Economic, Social, and Technological.
In the context of PEST analysis, the analysis of labor law would be most likely to fall under which of the PEST categories?
A. Political.
B. Economic.
C. Social.
D. Technological.
Macro-environmental analysis is concerned with analysis of
A. economic market structure.
B. an industry.
C. the characteristics of a country or region.
D. A firm.
Which of the following describes a form of analysis that is useful in evaluating the characteristics of a macro-environment?
A. PEST analysis.
B. SWOT analysis.
C. PERT analysis.
D. Focus analysis.
PEST analysis can be used when considering
domestic locations foreign locations
Yes Yes
Yes No
No Yes
No No
Which one of the following sets of characteristics should have the highest intensity of rivalry within an industry?
Industry Fixed Cost Structure Degree of Product Differentiation
High High
Low High
High Low
Low Low
In which one of the following circumstances are customers most likely to have the greatest ability to affect product prices?
A. There are few suppliers of the product.
B. There are many unrelated, low-quantity buyers of the product.
C. Information about the sources of the product is widely available.
D. The product is highly specialized.
Vico, Inc., is considering a horizontal expansion of its business into a new industry. Vico is concerned that other businesses may be considering moving into the same industry in the near future. Which one of the following forms of analysis would Vico most likely use to assess whether the industry is likely to be highly competitive in the near future?
A. PEST analysis.
B. SWOT analysis.
C. Five forces analysis.
D. Focus analysis.
Which one of the following features would not create a higher level of competitive threat posed by substitute goods or services in an industry?
A. Prices of substitutes are low relative to the price of an entity's goods or services.
B. Substitutes are readily available.
C. Low cost to buyers to switch goods/services.
D. Customers have strong brand loyalty.
In which of the following independent circumstances would entry of new competitors be most likely?
A. The capital investment required in the industry is significant.
B. There are significant economies of scale in the industry.
C. Customers incur significant cost in changing suppliers.
D. Access to inputs and process technology is readily available.
Which of the following is not a five forces factor used in determining the operating attractiveness of an industry?
A. Bargaining power of customers.
B. Threat of new competition.
C. Political instability.
D. Intensity of rivalry.
Which one of the following would not be an entity's strength in a competitive environment?
A. The entity has patent rights.
B. The entity has a favorable reputation in the market.
C. There are significant unmet needs in the market.
D. The entity has a favorable location for its market.
A regulatory agency has been considering the imposition of stricter regulations on an industry. Under SWOT analysis, the possibility of this new regulation would be considered
A. a strength.
B. a threat.
C. a weakness.
D. an opportunity.
Is SWOT analysis concerned with external environment, internal characteristics, or both?
External Environment Internal Characteristics
Yes Yes
Yes No
No Yes
No No
Which one of the following would be least likely to be a possible threat to an entity?
A. The possibility of changes in customer preferences.
B. The prospect of new regulations on an entity's industry.
C. Decreases in international trade barriers.
D. The possibility of restricted access to needed natural resources.
Which of the following types of analysis is directly concerned with the relationship between an entity and its environment?
A. PEST analysis.
B. SWOT analysis.
C. Five forces analysis.
D. PESTEL analysis.
Which of the following SWOT matrix relationship categories (intersections) poses the greatest risk to an entity?
A. S/O.
B. S/T.
C. W/T.
D. W/O.
Targeting a niche market always involves which of the following strategies, if either?
Cost Leadership Focus
Yes Yes
Yes No
No Yes
No No
Which of the following is a characteristic of a cost leadership entity?
Significant Capital Invested Efficient Distribution
No No
No Yes
Yes No
Yes Yes
Under which of the following strategies, if either, would the strength and dedication of an entity's marketing function be critical?
Cost Leadership Differentiation
Yes Yes
Yes No
No Yes
No No
Entities that adopt a differentiation strategy will provide goods or services that
Have Distinctive Features Have the Lowest Cost
Yes Yes
Yes No
No Yes
No No
Which one of the following is not a generic strategy identified by Porter?
A. Market focus.
B. Cost leadership.
C. Market monopoly.
D. Differentiation.
When an entity adopts a cost leadership strategy, which one of the following might it use to help carry out this strategy?
Processing Efficiencies Outsourcing
Yes Yes
Yes No
No Yes
No No
Which of the following forms of analysis, if either, is concerned only with analysis of the external environment of an entity?
PEST Analysis SWOT Analysis
Yes Yes
Yes No
No Yes
No No
Which one of the following is least likely to be useful in deciding in which country an entity should operate?
A. The economic system.
B. The entity's strategy.
C. An industry analysis.
D. The economic market structure
Goals established in the strategic planning process should be
Measurable Time-bound
Yes Yes
Yes No
No Yes
No No
PEST analysis and SWOT analysis are assessment techniques used in the strategic planning process. Are these forms of analysis primarily concerned with "where" an entity should be located or with "how" an entity should operate?
PEST Analysis SWOT Analysis
How Where
How How
Where How
Where Where