Test your basic knowledge |

DSST Introduction To Business

Subjects : dsst, business-skills, bvat

Instructions:

Answer 50 questions in 15 minutes.
If you are not ready to take this test, you can study here.
Match each statement with the correct term.
Don't refresh. All questions and answers are randomly picked and ordered every time you load a test.

This is a study tool. The 3 wrong answers for each question are randomly chosen from answers to other questions. So, you might find at times the answers obvious, but you will see it re-enforces your understanding as you take the test each time.

1. Large companies increasingly are subcontracting work to small businesses through a process called _____________.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.

2. In addition to the full body of laws that apply to individuals - companies must also comply to a subset of laws commonly referred to as __________ law.
Liability - Because many of these product liability lawsuits seem frivolous and excessive - many lawmakers are beginning to question the strictness with which the laws are interpreted.
Intrapreneurs - Work units led by intrapreneurs are formed to provide the parent company with creative ideas usually hindered by the red tape and procedures of a large-scale corporate environment.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
Taxes - Laws surrounding the taxes of businesses have developed to such an extent that entire segments of accounting and legal professionals often help companies and individuals with their interpretation and compliance

3. The majority of small businesses are what are known as ________ businesses. They are built around the personal and financial needs of an individual or family - and are not typically designed to grow into large enterprises.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Lifestyle - Roughly 80 to 90% of small businesses are lifestyle businesses. The remainder are called high-growth ventures and are started with the intent of rapid expansion.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise

4. Customs _______ - or import taxes - vary with the product and its country of origin. They are designed to protect American businesses against foreign competition.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Joint Venture - In countries where foreign companies are prohibited from owning facilities outright or from investing in a local business - a joint venture might be the only way to do business in that country.
Dumping - Dumping is a tactic often used to win foreign customers or to reduce product surpluses. Countries such as the U.S. impose stiff antidumping penalties in order to protect domestic producers of similar products.
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise

5. One of the practices restricted by the landmark Clayton Antitrust Act was that of the _____ contract - which attempts to force buyers to purchase unwanted goods along with goods actually desired.
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
Tying - Microsoft was recently found guilty of violating antitrust laws - in large part because the court considered the bundling together of Web browsers and operating systems to be a tying contract.
POM - Production and operations management (POM) - sometimes just shortened to operations management - oversees all the activities involved in producing a firm's goods or services.
Balance - The balance of trade is not necessarily an accurate indicator of a nation's competitiveness in the world market. Fluctuations in currency - intrafirm trade - and several other factors can obscure the overall picture.

6. Usually used for sales staff - a ____________ is a form of payment that pays employees a percentage of sales made.
Commission - Depending on the company and position - a commission can be either the sole compensation or else an incentive payment made in addition to salary or wages.
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.

7. Most industrialized countries have regulations against ________ - the practice of selling large quantities of a product at a price lower than the cost of production or below what the company would charge in its own home market.
Taxes - Laws surrounding the taxes of businesses have developed to such an extent that entire segments of accounting and legal professionals often help companies and individuals with their interpretation and compliance
Dumping - Dumping is a tactic often used to win foreign customers or to reduce product surpluses. Countries such as the U.S. impose stiff antidumping penalties in order to protect domestic producers of similar products.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.

8. The rise and spread of the __________ is one of the major factors contributing to the dramatic increase in small businesses - as well as the number of employees who now telecommute.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
Intrapreneurs - Work units led by intrapreneurs are formed to provide the parent company with creative ideas usually hindered by the red tape and procedures of a large-scale corporate environment.
HR - The human resources (HR) department is generally in charge of hiring employees for a company - ensuring the quality of their job performance - and administering their compensation and benefits.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.

9. The ________ department plans the best way to hire employees - oversee their training - evaluate their performance - and compensate them.
Chain - The supply-chain begins with the provider of raw materials and ends with the company that produces the finished product. Supply-chain management is based upon the belief that all companies involved will benefit from working more closely toget
HR - The human resources (HR) department is generally in charge of hiring employees for a company - ensuring the quality of their job performance - and administering their compensation and benefits.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.
Payments - In addition to business transactions - the balance of payments also measures money spent on foreign investment - military expenditures - tourism - and other international transactions. A country - obviously wants a favorable balance of pay

10. A ________ is a business arrangement in which a small business obtains the rights to sell the goods or services of the supplier within a specific territory.
Taxes - Laws surrounding the taxes of businesses have developed to such an extent that entire segments of accounting and legal professionals often help companies and individuals with their interpretation and compliance
Franchise - In exchange for an initial fee and possibly monthly royalties - a buyer can obtain a franchise of a larger company and have the right to sell its goods and services.
Lifestyle - Roughly 80 to 90% of small businesses are lifestyle businesses. The remainder are called high-growth ventures and are started with the intent of rapid expansion.
Temporary - It is estimated that over a quarter of all temporary employees hired remain on the job assignment for one year or more. Businesses often try to save money and increase their flexibility by building their workforce around part-time and tem

11. _______ _________ are investment specialists who raise pools of capital from large private and institutional sources in exchange for a portion of the ownership - with the objective of making a considerable profit on the investment within a relatively
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.
Venture Capitalists - Small businesses that need large sums of investment (usually $10 million or more) and that have potential for rapid growth often turn to venture capitalists for financing.
Assurance - Broader than more basic quality control approaches - a quality assurance system ensures that every stage of production - from design to final product - meets or exceeds preset quality standards.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.

12. One way to measure a nation's level of international trade is to determine its _________ of trade - The total value of the productions a nation exports minus the total value of the products it imports - over some period of time.

13. One common incentive program is the ________ _________ system - in which a company distributes a portion of its profits to employees. It encourages employees to work harder - since the more profits the company makes - the larger the compensation will
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Forecast - Although a production forecast cannot be predicted with certainty - it is an essential tool for use in the planning - budgeting - and scheduling of resources.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.
Business Plan - Not only does a business plan help sway potential investors - it also provides the company with an overall strategy and guides its operations

14. The _____ is a government agency that serves as an invaluable resource and advocate for small businesses - often providing them with financial assistance - training - and a variety of helpful programs.
SBA - Among other services - the Small Business Administration (SBA) will back bank loans to qualified business owners - a guarantee that usually results in longer repayment terms.
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to
Incubators - Incubators are centers that provide small businesses with a professional setting and various resources - legal and accounting services - marketing support - etc. - they might need to get started.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.

15. In 1997 - the decision by Thailand and Indonesia to unpeg its currency from the U.S. dollar and use instead a _________ exchange rate system triggered a series of reactions around the world and ignited a worldwide economic crisis.
Floating - Neither Thailand or Indonesia were ready when their currency devalued rapidly after switching to a floating exchange rate system. In such a system - the value of a currency is not determined in relation to more stable currencies - but in r
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise
Comparative Advantage - The comparative advantage theory is based upon the argument that specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.
Agency - Some better known examples of a regulatory agency include the Occupational Safety and Health Administration (OSHA) - the Equal Employment Opportunity Commission (EEOC) - and the Environmental Protection Agency (EPA).

16. Following job analysis - the human resources staff will use their findings to complete a ____ ___________ - a formal statement summarizing the tasks involved in the job and the conditions under which the employee will work.
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.
Orientation - Although orientation programs can vary from an hour-long information session to 'integration' curriculums that last several months - they all are created with the intention of helping new employees understand their role in the organizat
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav

17. Usually - human resources will use the job description to develop a ____ __________ - describing the skills - education - and previous experience that the job requires.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Antitrust - Other famous examples of antitrust legislation include the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). Such regulations sought to break up the power of huge companies such as Standard Oil.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.

18. A company's sequence of events that transforms resources (or inputs) into products and services is called the _________ process.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.
Conversion - The conversion process can be either an analytic system - which breaks raw materials into one or most distinct products - or a synthetic system - which combines two or more materials to form a single product.
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.

19. In the United States - _______ have traditionally been used not only to raise revenue for government - but also to encourage or discourage certain types of behavior - including the restriction of certain business activities.
Taxes - Laws surrounding the taxes of businesses have developed to such an extent that entire segments of accounting and legal professionals often help companies and individuals with their interpretation and compliance
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Franchise - In exchange for an initial fee and possibly monthly royalties - a buyer can obtain a franchise of a larger company and have the right to sell its goods and services.
Venture Capitalists - Small businesses that need large sums of investment (usually $10 million or more) and that have potential for rapid growth often turn to venture capitalists for financing.

20. Financial compensation other than wages - salaries - and incentives is called employee ______________.
Forecasting - After analyzing the company's future goals - the HR department begins planning the company's staffing needs by forecasting the supply and demand for employees.
PAC - Through a political action committee (PAC) - a business can solicit contributions from its employees and then allocate the money to various candidates. PACs are controversial and will likely be a target of campaign reform in the near future.
Benefits - Some of the more common forms of employee benefits include medical and dental insurance; vacation - holiday - and sick pay; stock options; and retirement benefits.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.

21. A _______ ________is a special type of strategic alliance in which two or more organizations join together to create a new business entity that is legally separate and distinct from its parents.
Joint Venture - In countries where foreign companies are prohibited from owning facilities outright or from investing in a local business - a joint venture might be the only way to do business in that country.
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Payments - In addition to business transactions - the balance of payments also measures money spent on foreign investment - military expenditures - tourism - and other international transactions. A country - obviously wants a favorable balance of pay

22. Employees who receive _______ earn cash payment based on the number of hours the employee has worked or the number of units the employee has produced.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
Commission - Depending on the company and position - a commission can be either the sole compensation or else an incentive payment made in addition to salary or wages.
Payments - In addition to business transactions - the balance of payments also measures money spent on foreign investment - military expenditures - tourism - and other international transactions. A country - obviously wants a favorable balance of pay
Wages. Unlike salaried workers - workers earning wages receive cash payment directly related to the number of hours worked or pieces produced. Wages provide an incentive to an employee to produce more in order to receive a higher paycheck.

23. As foreign markets continue to grow in importance - the number of ____________ - or companies with operations in more than one country - is likewise increasing.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.
Chain - The supply-chain begins with the provider of raw materials and ends with the company that produces the finished product. Supply-chain management is based upon the belief that all companies involved will benefit from working more closely toget
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.

24. Quality __________ is a comprehensive system of policies - practices - and procedures implemented throughout a company to create and produce quality goods and services.
Benefits - Some of the more common forms of employee benefits include medical and dental insurance; vacation - holiday - and sick pay; stock options; and retirement benefits.
Small - The small business is a cornerstone of the U.S. economic system - particularly following the past decade - when a drastic increase in start-up companies made the U.S. economy a growth engine for the world.
Assurance - Broader than more basic quality control approaches - a quality assurance system ensures that every stage of production - from design to final product - meets or exceeds preset quality standards.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.

25. An increasingly used recruiting strategy is for companies to hire ___________ employees to assess their on-the-job performance before hiring them permanently.
Background Checks - Failure to conduct thorough background checks can lead to expensive lawsuits and higher health care costs - decreased productivity - and harm to employees and customers. Inadequate verification of credentials can potentially make
Small - The small business is a cornerstone of the U.S. economic system - particularly following the past decade - when a drastic increase in start-up companies made the U.S. economy a growth engine for the world.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Temporary - It is estimated that over a quarter of all temporary employees hired remain on the job assignment for one year or more. Businesses often try to save money and increase their flexibility by building their workforce around part-time and tem

26. To stimulate the innovation commonly found in small businesses - many large companies have started small enterprises run by ___________ - or people who create ideas and innovation of any kind from within an organization.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Intrapreneurs - Work units led by intrapreneurs are formed to provide the parent company with creative ideas usually hindered by the red tape and procedures of a large-scale corporate environment.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.

27. ___________ - or selling and shipping goods and services to another country - is one of the least risky forms of international business activity.
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise
Venture Capitalists - Small businesses that need large sums of investment (usually $10 million or more) and that have potential for rapid growth often turn to venture capitalists for financing.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.

28. A type of trade restriction - _________ limit the amount of a particular good that a nation will allow to be imported during a year.
Just In Time - A just-in-time system minimizes waste and keeps costs down. However - it requires careful coordination between manufacturers and suppliers in order to work effectively.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
Quotas - Quotas may be set either in quantity or in value. Once a foreign product hits its quota - additional shipments typically will face stiff tariffs.
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise

29. Once human resources has decided it needs to fill a particular position - it will then evaluate the requirements of the position through a formal - objective method called ___ _______.
Sanction - Traditionally - a sanction has been used by the government as a forceful attempt to make a country change its behavior. However - sanctions are being used more sparingly today - as studies have shown them to be generally ineffective.
Chain - The supply-chain begins with the provider of raw materials and ends with the company that produces the finished product. Supply-chain management is based upon the belief that all companies involved will benefit from working more closely toget
Job Analysis - Job analysis is the process by which jobs are studied to determine the exact tasks and dynamics needed to perform them.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.

30. Most companies use a system of _______ control to determine the right quantity of various items to have on hand and to keep track of their location - use - and condition.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.
Deficit - In 1999 - the U.S. trade deficit soared to record heights - due to a falloff in U.S. exports rather than a surge in foreign imports.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.

31. Similar to venture capitalists - ______ ________ tend to be wealthy individuals who are willing to loan smaller amounts of money and to stay involved with the company for a longer period of time.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
Lifestyle - Roughly 80 to 90% of small businesses are lifestyle businesses. The remainder are called high-growth ventures and are started with the intent of rapid expansion.
Business Plan - Not only does a business plan help sway potential investors - it also provides the company with an overall strategy and guides its operations
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.

32. Many recent international trade agreements and organizations have supported the basic principles of ______ _______ - a theory that each nation will ultimately benefit the most if they freely trade with each other without restrictive measures.
Forecast - Although a production forecast cannot be predicted with certainty - it is an essential tool for use in the planning - budgeting - and scheduling of resources.
Free Trade - The General Agreement on Tariffs and Trade (GATT) and the World Trade Organization (WTO) are both famous examples of organizations founded to support free trade. The WTO - in particular - has been a target for American protesters who fee
CAD - Computer-aided design (CAD) is just one of the major developments in manufacturing automation today. Others include computer-aided engineering (CAE) - computer-aided manufacturing (CAM) - and flexible manufacturing system (FMS).
Strategic Alliance - To increase their competitive advantage in foreign markets - many companies will form a strategic alliance with a foreign company. Companies in such a relationship will typically share ideas - risks - and profits in an attempt to

33. _____________ - or subcontracting work to outside companies - is a common staffing strategy by companies that lack specialized resources internally.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.
Outsourcing - Although outsourcing might give a company increased flexibility and additional expertise - it can also result in a loss of control over the work and a greater dependence on suppliers.
Absolute Advantage - Whenever a nation can produce a particular item more efficiently than all other nations - it has an absolute advantage for that product. Since such advantages are usually based on the availability of natural resources - they rare
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.

34. The ____ ____ ____ system is one of the most used methods of inventory control and production planning today - making sure that materials arrive just when they are needed with minimal inventory and waste.
Just In Time - A just-in-time system minimizes waste and keeps costs down. However - it requires careful coordination between manufacturers and suppliers in order to work effectively.
Duties - Customs duties typically have the effect of raising the prices of imports to a level comparable to the price of similar American-made merchandise
Recruiting - Recruiting usually begins by looking for a suitable candidate from within an organization or from an employee's recommendation. Posting a position to the public is often used as a last resort.
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.

35. Since campaign laws limit the abilities of a business to donate money directly to a candidate - businesses will often instead funnel money through a _______.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.
Payments - In addition to business transactions - the balance of payments also measures money spent on foreign investment - military expenditures - tourism - and other international transactions. A country - obviously wants a favorable balance of pay
Sanction - Traditionally - a sanction has been used by the government as a forceful attempt to make a country change its behavior. However - sanctions are being used more sparingly today - as studies have shown them to be generally ineffective.
PAC - Through a political action committee (PAC) - a business can solicit contributions from its employees and then allocate the money to various candidates. PACs are controversial and will likely be a target of campaign reform in the near future.

36. __________ is the term for the process of attracting appropriate applicants for an organization's jobs.

37. The term _________ refers to the coordination of an organization's resources for the manufacture of goods or the delivery of services.

38. Administering ___________ - or the combination of payments in the form of wages or salaries - incentive programs - employee benefits - and employer services - is one of the major responsibilities of the human resources department.
Absolute Advantage - Whenever a nation can produce a particular item more efficiently than all other nations - it has an absolute advantage for that product. Since such advantages are usually based on the availability of natural resources - they rare
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
Joint Venture - In countries where foreign companies are prohibited from owning facilities outright or from investing in a local business - a joint venture might be the only way to do business in that country.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.

39. More extreme than a quota - an ________ completely bans the import or export of certain products.

40. __________ occurs when a multinational corporation establishes facilities in a foreign country or in some other way invests money directly into foreign business enterprises.
Start-Up - Founding a start-up company is the most common form of beginning a small business. The other two ways are to buy an existing business or obtain a franchise.
Payments - In addition to business transactions - the balance of payments also measures money spent on foreign investment - military expenditures - tourism - and other international transactions. A country - obviously wants a favorable balance of pay
FDI - A company that increases its involvement in foreign countries through establishing Foreign Direct Investment (FDI) might build marketing or production facilities - or even purchase existing firms.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.

41. Facilities specifically designed to house small businesses during their early growth phase are known as __________.
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.
Lifestyle - Roughly 80 to 90% of small businesses are lifestyle businesses. The remainder are called high-growth ventures and are started with the intent of rapid expansion.
Incubators - Incubators are centers that provide small businesses with a professional setting and various resources - legal and accounting services - marketing support - etc. - they might need to get started.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.

42. One of the most important ways to persuade lenders and investors to finance your business is through preparing a ________ _____ - a written document that provides an orderly statement of a company's goals and how it intends to achieve those goals.
Agency - Some better known examples of a regulatory agency include the Occupational Safety and Health Administration (OSHA) - the Equal Employment Opportunity Commission (EEOC) - and the Environmental Protection Agency (EPA).
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
Business Plan - Not only does a business plan help sway potential investors - it also provides the company with an overall strategy and guides its operations
Critical - The sequence of events that makes up the critical path requires the longest time to complete. If any step on this path falls behind schedule - then the entire operation will be delayed.

43. Specific items are subject to _____ taxes - regulatory taxes that are intended to help control potentially harmful practices or to help pay for public services used by taxpayers.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
Deficit - In 1999 - the U.S. trade deficit soared to record heights - due to a falloff in U.S. exports rather than a surge in foreign imports.
Excise - Gasoline - tobacco - and liquor are all subject to excise taxes. Federal excise taxes are also levied on certain services of a national scope - such as air travel and long-distance telephone calls.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.

44. More and more companies are using __________ agreements as a source of international revenue - allowing foreign companies to use their intellectual property in exchange for a royalty or fee.
Joint Venture - In countries where foreign companies are prohibited from owning facilities outright or from investing in a local business - a joint venture might be the only way to do business in that country.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
Comparative Advantage - The comparative advantage theory is based upon the argument that specialization and exchange will increase a country's total output and allow both trading partners to enjoy a higher standard of living.
Venture Capitalists - Small businesses that need large sums of investment (usually $10 million or more) and that have potential for rapid growth often turn to venture capitalists for financing.

45. NAFTA is a controversial example of a ________ bloc - an organization of nations that removes barriers to trade among their members and also establishes uniform barriers to trade with nonmember nations.
Agency - Some better known examples of a regulatory agency include the Occupational Safety and Health Administration (OSHA) - the Equal Employment Opportunity Commission (EEOC) - and the Environmental Protection Agency (EPA).
Trading - In 1994 - the United States - Canada - and Mexico formed the trading bloc known as NAFTA. Supporters of NAFTA say that jobs in the U.S. have multiplied due to increased exports. Opponents - on the other hand - contend that American jobs hav
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
Benefits - Some of the more common forms of employee benefits include medical and dental insurance; vacation - holiday - and sick pay; stock options; and retirement benefits.

46. Defined contribution plans - defined benefits plans - and 401(k) plans are all examples of _______ plans - the most popular type of retirement coverage in companies today.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.
Job Specification. The last step in evaluating job requirements is the drafting of a job specification. This formal statement is a critical tool in determining whether or not an applicant is appropriate for the position.
Euro - These eleven countries account for nearly 20 percent of the world's gross domestic product - leading some to believe that the euro might one day rival the dollar or yen as the international currency of trade.
Joint Venture - In countries where foreign companies are prohibited from owning facilities outright or from investing in a local business - a joint venture might be the only way to do business in that country.

47. The Federal Trade Commission Act (1914) is a famous example of _______ legislation - intended to prevent individual companies or groups of companies from gaining control of markets in ways that restrain competition or harm consumers.
Tying - Microsoft was recently found guilty of violating antitrust laws - in large part because the court considered the bundling together of Web browsers and operating systems to be a tying contract.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying activities.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
Antitrust - Other famous examples of antitrust legislation include the Sherman Antitrust Act (1890) and the Clayton Antitrust Act (1914). Such regulations sought to break up the power of huge companies such as Standard Oil.

48. Particularly with the recent increase in workplace violence - human resource departments are more carefully conducting ____________ ________ to verify all educational credentials and previous jobs - to account for any large time gaps between jobs - a
Background Checks - Failure to conduct thorough background checks can lead to expensive lawsuits and higher health care costs - decreased productivity - and harm to employees and customers. Inadequate verification of credentials can potentially make
Dumping - Dumping is a tactic often used to win foreign customers or to reduce product surpluses. Countries such as the U.S. impose stiff antidumping penalties in order to protect domestic producers of similar products.
Deficit - In 1999 - the U.S. trade deficit soared to record heights - due to a falloff in U.S. exports rather than a surge in foreign imports.
Gain Sharing - Though similar to profit sharing - gain sharing differs in that it further encourages employees to think of innovative ways to save money for the company and improve its overall operation.

49. Some countries practice an economic policy of ___________ - where they restrict international trade in order to shield a country's industries from foreign competition and the possible loss of jobs in those industries.
Liability - Because many of these product liability lawsuits seem frivolous and excessive - many lawmakers are beginning to question the strictness with which the laws are interpreted.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
Background Checks - Failure to conduct thorough background checks can lead to expensive lawsuits and higher health care costs - decreased productivity - and harm to employees and customers. Inadequate verification of credentials can potentially make

50. __________ is the process by which the government sets the ground rules and basic standards of proper business behavior - in order to prevent conflicts and facilitate the workings of the economic system.
PAC - Through a political action committee (PAC) - a business can solicit contributions from its employees and then allocate the money to various candidates. PACs are controversial and will likely be a target of campaign reform in the near future.
Regulation - In most sectors of the economy - government regulation ensures that all competitors have an equal chance of producing a product - reaching the market - and making a profit.
Absolute Advantage - Whenever a nation can produce a particular item more efficiently than all other nations - it has an absolute advantage for that product. Since such advantages are usually based on the availability of natural resources - they rare
FDI - A company that increases its involvement in foreign countries through establishing Foreign Direct Investment (FDI) might build marketing or production facilities - or even purchase existing firms.