DSST Introduction To Business

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. In 1999 - eleven European countries turned over control of their individual monetary policies to the newly created European Central Bank. One of the major reasons for joining forces was the anticipated advantages that would come from creating a unifi

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2. 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.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
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.
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.
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.


3. 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.
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.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.


4. Large companies increasingly are subcontracting work to small businesses through a process called _____________.
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
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.
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.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.


5. Facilities specifically designed to house small businesses during their early growth phase are known as __________.
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.
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.
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.
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.


6. In order to ensure that all new employees understand the company's goals - policies - and procedures - most organizations have ________ programs that help acclimate employees to their new work environment.

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7. The ultimate goal of a _________ ___________ is not to judge the individual employee but rather to improve their on-the-job performance. It lets employees understand how they are presently doing - instructs them on how they can improve performance -
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.
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.
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.
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.


8. ______ is widely used today to apply computer graphics and mathematical modeling in the design of products.
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).
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.
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.
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


9. __________ 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.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).
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).
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
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.


10. 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
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
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
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
Profit Sharin - A company that participates in profit sharing usually distributes profits to employees on an quarterly - semi-annually - or annual basis.


11. 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.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
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).
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
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.


12. _____________ - or subcontracting work to outside companies - is a common staffing strategy by companies that lack specialized resources internally.
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.
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.
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.
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


13. Business owners pay as much as $150 billion every year due to product ________ lawsuits - which hold the producer or seller responsible for damages or injuries to the consumer.
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.
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.
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
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.


14. Customs _______ - or import taxes - vary with the product and its country of origin. They are designed to protect American businesses against foreign competition.
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.
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
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.
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


15. Because competitors in an industry often have common objectives when it comes to government action - they commonly unite to form a __________ group in an attempt to persuade legislators to vote for their group's interest.
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.
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.
Lobbying - The American Banking Association and the American Medical Association are both examples of associations typically involved in lobbying 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


16. 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.
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.
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.
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.


17. 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.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.
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.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
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.


18. Quality __________ is a comprehensive system of policies - practices - and procedures implemented throughout a company to create and produce quality goods and services.
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
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.
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.
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.


19. 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.
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
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.
Inventory - To minimize risk and cost - and also to increase manufacturing efficiency - most companies have established a system of inventory control.
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.


20. A ________ is a type of embargo that is politically motivated - banning trade with a particular nation.
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
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
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.
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.


21. Many companies now integrate all of the facilities - functions - and activities involved in the production of goods and services - from suppliers to customers - through a process called Supply ___________ Management
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
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.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.
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


22. As foreign markets continue to grow in importance - the number of ____________ - or companies with operations in more than one country - is likewise increasing.
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
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.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.


23. 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.
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.
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.
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.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.


24. 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.
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.
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
Performance Appraisal. Most human resources managers develop performance appraisal systems to objectively evaluate employees according to set - job-related criteria.
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.


25. In the past few decades - some industries that were under strict government control have been opened up to competition through ___________ - or the abandonment or relaxation of existing regulations.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
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
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.
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.


26. A company's sequence of events that transforms resources (or inputs) into products and services is called the _________ process.
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
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.
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.
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.


27. 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.
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.
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.


28. __________ occurs when a multinational corporation establishes facilities in a foreign country or in some other way invests money directly into foreign business enterprises.
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.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
Incentives. Incentives are often effective because they make achievements - not merely activities - the basis for an employee's payment.
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


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

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

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31. 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.
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.
Exporting - Exporting permits a company to enter a foreign market gradually - with only limited marketing - research - and distribution costs.
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.
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.


32. 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.
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.
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
Pension - Pension plans are company-sponsored programs for providing employees with income when they retire.


33. 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.
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.
MNCs - Multinational Corporations (MNCs) will often earn more than half of their revenue from foreign sales.
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
Embargo- Although an embargo is usually established to protect a nation's industry from foreign competition - it can sometimes be done for other reasons. The U.S. - for example - bans the importation of toys with lead paint due to health reasons.


34. 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.
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
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.
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
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.


35. 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.
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.
Protectionism - Emerging economies often practice protectionism in order to give new or weak industries an opportunity to grow and strengthen.
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
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. Since campaign laws limit the abilities of a business to donate money directly to a candidate - businesses will often instead funnel money through a _______.
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
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.
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
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


37. 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
Compensation. Compensation is the umbrella term covering all the various money - benefits - and services paid to employees for their work.
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
Job Description. The job description helps HR determine the qualifications needed by potential applicants to be considered for the job.
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


38. Because of the high costs and regulatory complexities of selling stock through an initial public offering (IPO) - many companies are instead choosing to sell shares of stock directly to investors through a _______.
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
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.
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).
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).


39. 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.
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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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.
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.


40. ____________ is a common payment approach that uses wide pay grades. It allows today's flatter companies to reward employees without having to move them up a hierarchy.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
Broadbanding - Because the company has fewer - broader pay grades - broadbanding allows companies to move employees to different positions without being restricted by the pay grades normally associated with specific jobs.
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.


41. _______ _________ 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
Angel Investors - Risky start-ups that have trouble getting loans from a bank can sometimes find angel investors to finance their business.
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.
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.


42. A regulatory _______ is any of a wide variety of administrative groups established to protect the rights of one or more group of stakeholders from the potentially harmful actions of business.
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
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).
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.


43. Financial compensation other than wages - salaries - and incentives is called employee ______________.
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.
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.
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.
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.


44. A type of trade restriction - _________ limit the amount of a particular good that a nation will allow to be imported during a year.
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.
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.
Internet - The Internet has made accessible to small businesses the types of resources and information that were previously available only to larger firms.
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.


45. The ____________ ____________ theory states that a country should produce and sell to other countries those items it can produce economically - and trade for those it cannot produce efficiently or at a lower cost.

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46. Roughly two-thirds of business founders start from scratch with new ventures - commonly called ________ ___________ company.
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.
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.
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.
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.


47. In today's customer-focused - quality-oriented economy - many current production systems use traditional mass production techniques to create customized goods and services - a system known as mass __________.
Deregulation - Until recent deregulation measures were taken - companies in the airline and banking industries were under such strict government control that they had little or no competition.
Customization - Systems of mass customization recognize that consumers have individual needs and are best served by products that can be easily customized for them.
Outsourcing - The increased practice of outsourcing specialized work has allowed many large firms to downsize and work with smaller staffs.
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.


48. The ________ department plans the best way to hire employees - oversee their training - evaluate their performance - and compensate them.
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.
Business - Business law includes those legal elements that directly affect business activity - including laws pertaining to business licensing - employee safety - and corporate income taxes.
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.
DPO - The growth of the Internet and its resources has made it easier for companies to sell stock through a direct public offering (DPO).


49. A _____ business can be defined as a company that is independently owned and operated - is not dominant in its field - and is relatively small in terms of sales and number of employees.
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.
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.
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.
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.


50. 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.
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
Licensing - Since a company has already incurred the costs of developing the intellectual property - a licensing agreement involves little out-of-pocket costs.
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).