NEW YORK STATE FBLA INTRODUCTION TO BUSINESS

2009
PLEASE DO NOT OPEN THIS TEST UNTIL DIRECTED TO DO SO Test Directions 1. Complete the information requested on the answer sheet. PRINT YOUR NAME on the Name line. PRINT the name of the event, INTRODUCTION TO BUSINESS on the Subject line. PRINT the name of your CHAPTER on the DATE line. 2. All answers will be recorded on the answer sheet. Please do not write on the test booklet. Scrap paper will be provided. 3. Read each question completely before answering. With a NO. 2 pencil, blacken in your choices completely on the answer sheet. Do not make any other marks on the answer sheet, or the scoring machine will reject it. 4. You will be given 60 minutes for the test. You will be given a starting signal and a signal after 50 minutes have elapsed. 5. Tie will be broken using the last 10 questions of the test.

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Which of the following is not a capital resource? a. a printing press b. a factory building c. a delivery truck d. an employee An economic system in which individuals own most of the capital resources and carry on business activities with a minimum of government control is called a. capitalism b. communism c. socialism d. democratic socialism A form of business organization that sells shares of stock to stockholders is called a a. cooperative b. corporation c. sole proprietorship d. partnership An important difference between a consumer finance company and a credit union is a. the customers own a credit union b. a credit union makes smaller loans c. a credit union only provides customers with savings accounts d. a consumer finance company requires loans to be paid back in installments Which of the following is not a factor used by lenders to evaluate a persons credit worthiness? a. past credit history b. employment status and income c. current personal financial status d. education background A charge account in which the customer may charge purchases at any time but pay the whole debt at the end of each month is called a(n) a. installment plan b. open charge account c. revolving charge account d. budget account Payments made to employees for injury and loss of income caused by accidents on the job is known as a. dividends b. unemployment insurance c. workmens compensation d. disability coinsurance
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Alice signs only her name on the back of her paycheck. This is known as a a. special endorsement b. restrictive endorsement c. blank endorsement d. full endorsement The amount paid by a policyholder for insurance coverage is known as the a. premium b. deductible c. policy rider d. coverage Shares of stock that have no preference over other shares of stock are known as a. preferred stock b. common stock c. no-par stock d. registered stock A familys net worth is a. the total of its assets b. the total of its liabilities c. the difference between its assets and its liabilities d. the total amount invested in its savings plans Labor and management can most effectively resolve their differences regarding wages and working conditions through a. individual negotiations b. picketing c. arbitration by government d. collective bargaining An example of a tax that is generally classified as progressive is a. a sales tax b. a local real estate tax c. the federal income tax d. a tariff The study of the surrounding work area and its effect on workers is referred to as a. the work environment b. ergonomics c. workplace efficiency d. workmens compensation

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The stage of the business cycle which is generally characterized by declining income, production, and employment is referred to as a. recession b. prosperity c. recovery d. depression When the supply of a product is greater than the demand for that product, which condition exist? a. deficit b. profit c. surplus d. shortage Individuals are protected from discrimination in the workplace by the a. Better Business Bureau b. Equal Employment Opportunity Commission c. Occupational Safety and Health Administration d. Social Security Administration An example of a fixed budget expense is a. food b. clothes c. entertainment d. rent payment Outstanding checks are subtracted from the a. bank statement balance b. checkbook balance c. bank service charge d. cancelled checks Lee wants to buy a new television, which costs $420. The terms of purchase require a down payment of 10% and 20 monthly payments of $25 each. How much money can Lee save by paying cash for the TV? a. $42.00 b. $67.00 c. $82.00 d. $122.00 What information is found on the W-2 form? a. the number of dependents b. marital status c. the amount of income tax withheld d. age
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Brenda is paid an hourly wage of $7.50. She receives time-and-a-half for working over 40 hours in a given week. What is Brendas gross pay if she works 43 hours in one week? a. $300.00 b. $311.42 c. $333.00 d. $33.75 When a retailer is selling a product at an unusually low price to attract customers into the store, they are using a. odd-cent pricing b. a loss leader c. even-number pricing d. demand pricing Henry owns a car valued at $6,000. He has liability and comprehensive insurance coverage, with a $500 deductible. He has no collision coverage. How much would he collect from the insurance company if his automobile were destroyed in an accident in which he was at fault? a. $500.00 b. $5,500.00 c. $6,000.00 d. nothing A measure of the risk involved in giving credit to an individual is called a credit a. reference b. report c. rating d. risk The organization which insures bank accounts up to $100,000 is the a. FICA b. FDIC c. ABA d. FICUA What is the first step in the decision making process? a. consider the choices b. evaluate the choices c. identify the problem d. evaluate the outcome If the sales tax on a purchase is 7.25%, what tax would you pay on the purchase of a DVD player costing $189.00? a. $13.23 b. $13.70 c. $134.95 d. $202.70
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A personal check which is guaranteed for payment by a bank is called a(n) a. certified check b. cashiers check c. outstanding check d. travelers check Which form of business ownership employs the greatest number of people in this country? a. sole proprietorships b. partnerships c. corporations d. cooperatives Which of the following is not a function of marketing? a. accounting b. promotion c. pricing d. transporting A patent is a legal protection for an inventor of a product or process giving them an exclusive right to produce or use it in production for a period of a. 1 year b. 17 years c. 25 years d. 50 years following the death of the inventor A business letter written for the purpose of securing a personal job interview is a a. letter of recommendation b. reference letter c. follow-up letter d. cover letter Which of the following sets of words is not considered gender-biased? a. salesperson and policeman b. salesman and policeperson c. flight attendant and salesperson d. stewardess and actor When both sides of an argument change their position to reach an agreement, it is called a a. conflict b. consensus c. compromise d. grievance There are four means of dealing with risk. Purchasing insurance is one method of a. assuming risk b. avoiding risk
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c. transferring risk d. ignoring risk 37. The distribution of profits by corporations to their shareholders is called a. capital gains b. dividends c. reinvestments d. exclusions Low employee morale often results in increased a. absenteeism b. productivity c. job satisfaction d. company loyalty Which business risk is insurable? a. slump in sales revenue b. changes in economic conditions c. changes in government regulations d. injury to customers and employees What is the purpose of a follow-up letter? a. To be sure an employer has received a completed application. b. To request an interview for a job. c. To thank a potential employer for an interview. d. To discuss possible job interview questions. The majority of business enterprises in the United States are organized as a. corporations b. general partnerships c. franchises d. sole proprietorships On April 1, your checkbook balance was $5,823.26. During the month you made a deposit of $1,083 and you wrote two checks: $142.26 and $73.32. What was your ending balance on April 30? a. $4,955.84 b. $6,690.68 c. $6,906.26 d. $7,121.84 An example of a demand deposit is a(n) a. certificate of deposit b. checking account c. revolving credit account d. saving account

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Ditech.com, LendingTree.com, and E-Loan.com are Internet sites that help consumers a. calculate their credit scores b. obtain copies of their credit reports c. compare loan rates d. review new credit laws The two main, distinct parts of a budget are a. Car and food payments b. Income and expenses c. Rent and transportation d. Savings and allowances The effects of inflation are felt most severely by people who a. live on fixed incomes b. invest in stocks and bonds c. own a home d. work for the government People pay for the cost of government-provided goods and services through a. volunteer payments to government agencies b. the prices of the goods they buy c. taxes paid to local, state, and federal government d. transfer payments Businesses are more likely to succeed when the economy is a. contracting b. expanding c. in recession d. stable One of the benefits of international trade is that it a. can increase the standard of living b. creates unemployment in other countries c. decreases direct competition d. protects key industries in the economy One reason for the United States trade deficit is that a. it does not use quotas, tariffs, or embargoes to protect domestic business b. products once produced in the U.S. are now produced more efficiently by other countries c. the population of the U.S. is less technologically advanced that most other countries d. the U.S. population is growing faster than its ability to produce goods Consumers buy many items on credit because a. using credit is less expensive than paying cash b. many companies require it c. credit enables them to use items sooner
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d. it is the only way many items are sold 52. To correct a billing error on a credit card statement, you must a. close your credit card account b. find the source of the error and present you findings to the credit card company c. pay the disputed amount while waiting for the dispute to be resolved d. notify the creditor in writing of the error Credit bureaus are a. agencies that help consumers resolve credit disputes b. agencies that collect information to establish credit rating c. banks that make credit decisions d. companies the offer credit to consumers Money cannot be withdrawn from the bank without penalty during a certain time period if it is deposited in a a. certificate of deposit b. checking account c. money market account d. savings account Interest is a. borrowing money in exchange for your promise to pay it back b. the period of time that you have contracted for the loan c. the amount that it costs you for one year d. the amount you pay to use someone elses money The total value of all goods and services produced in a particular country in one year is its a. net worth b. open market value c. gross domestic product d. standard of living What is the effect of rising prices on a persons income? a. your income goes down b. your income buys less c. your income rises to meet prices d. your income is used to buy different things The condition that exists when buyers purchase exactly as much as sellers are willing to sell is known as a. supply and demand b. excess demand c. equilibrium d. price floor

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Which of the following is a product that is considered a commodity? a. automobiles b. crude oil c. personal computers d. houses Which of the following is a disadvantage of a sole proprietorship? a. limited life b. high tax rate c. legal constraints d. difficult to start Which of the following is not considered to be a liquid asset? a. savings account b. travelers checks c. shares of common stock d. checking account The purpose of government in a command economy is to a. ensure the production of consumer goods b. encourage individuals to start their own businesses c. make major economic decisions d. promote economic freedom An example of a nondurable good is a. a new car b. a used car c. a washing machine d. a paperback book The amount of money a person has left from his or her income after taxes is called a. gross personal income b. disposable personal income c. discretionary income d. taxable personal income How many Federal Reserve Districts are there in the United States? a. 6 b. 9 c. 12 d. 20 A major characteristic of economic services is that they must a. be tangible b. satisfy all human wants c. fulfill primary wants
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d. have monetary value 67. One use of discretionary income is spending on a. a new video game b. the monthly rent payment c. medical services d. transportation needs If a corporation goes out of business owing millions of dollars to it creditors, its stockholders a. declare bankruptcy b. forfeit their personal assets c. lose the money they invested d. split the debt payment equally Someone who enjoys nature and the outdoors may have an aptitude for a career in a. conservation b. wildlife management c. forestry management d. all of the above A cash flow analysis gives you important feedback on your a. assets and liabilities b. short-term and long-term debts c. income and spending patterns d. net pay and gross pay Credit card holders are known as convenience users when they a. carry credit balances beyond the grace period b. pay off their balances each month c. pay finance charges on unpaid balances d. use their debit cards A legal form that asks stockholders to transfer their voting rights is called a(n) a. pooling agreement b. proxy c. preemptive right d. annual report A business transaction occurs each time a business a. contacts a potential customer or client b. reports a profit c. issues a financial statement d. records a purchase

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Advertising a nonexistent bargain to lure customers into the store and then trying to sell them more expensive merchandise is known as a. a bait and switch tactic b. a loss leader c. misrepresentation d. price-fixing A frequently used restrictive endorsement on a check is a. For deposit only b. Pay to the order of c. Pay to bearer d. Do not cash A check that has been written but not yet returned to the bank for payment is a(n) a. certified check b. cashiers check c. outstanding check d. canceled check The written contract between a person buying insurance and the insurance company selling it is the a. premium b. binder c. insurance rider d. policy Product, price, place, and promotion are the four components of a. market share b. the marketing mix c. marketing positioning d. market segmentation When you are allowed to use your Visa or MasterCard to buy a product, the purchase has increased a. form utility b. possession utility c. information utility d. promotion utility Lets assume that your parents buy special snacks and cereals requested by you and your siblings. In this case, your parents would be identified as a. customers but not consumers of those products b. consumers but not customers of those products c. consumers and customers of those products d. neither customers nor consumers of those products
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Cooking instructions on packaging add value to food products by providing a. form utility b. time utility c. information utility d. promotion utility Unlimited wants and needs, combined with limited resources, results in a. economic scarcity b. product surplus c. price regulation d. a government subsidy A name, symbol, word, or design that identifies a product, service, or company is a a. trademark b. brand c. copyright d. product line Wayne earns a commission of 7% on all sales in excess of $2,000 plus a weekly salary of $275.00. If Wayne sold $4,750 worth of goods last week, what were his total earnings for the week? a. $192.50 b. $332.50 c. $467.50 d. $607.50 A furniture retailer sold a bookcase for $314.99 after a $65 markdown. What was the percent markdown? a. 4.85% b. 17.1% c. 18.3% d. 20.6% Which of the following types of business enterprise is classified as an extractor? a. an insurance company b. an automobile manufacturer c. a discount retail store chain d. a logging company What affects the level of employee compensation? a. employees abilities and their value to the company b. the supply and demand of that type of labor c. current economic conditions d. all of the above

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Which of the following occupations generally requires an apprenticeship? a. retail salesperson b. police officer c. electrician d. teacher The study of the way in which a nation chooses to use its resources to produce and market goods and services is known as a. gross domestic product b. Economics c. marketing d. scarcity The ups and downs in the level of economic activity over a period of time are called a(n) a. economic system b. economic growth c. business cycle d. recession A customers concern for product durability can best be described as a(n) a. rational buying motive b. emotional buying motive c. patronage buying motive d. personal buying motive Career interest inventories help you to a. choose the perfect job b. decide what company to work for c. choose a college major d. narrow your range of career choices Obsolescence occurs when a. a product no longer is selling in retail stores b. a product has become outdated and less useful c. a product is packaged in a new container d. the fundamental nature of the product is changed The cost of making one choice over another is called a. retail selling price b. economic cost c. opportunity cost d. production cost

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The circular flow of economic activity means that a. resources must be distributed equally to everyone in a nation b. we can renew natural resources such as trees by planting new seeds c. a large number of workers are in the labor force d. businesses depend on individuals to buy their goods and services, while individuals rely on businesses to buy their labor Goals that will be accomplished in a time period of less than 12 months are referred to as a. personal goals b. short-term goals c. intermediate goals d. long-term goals A labor unions major decisions are made by a. elected union leaders b. union members c. company executives d. government officials Preferred stock a. carries more investment risk than common stock b. carries less investment risk than common stock c. pays dividends after common stock d. costs less than common stock The production of goods involves natural resources, capital, effective management, and a. labor b. profit c. financial security d. price stability A movement to inform consumers and protect them from business malpractices is a. affirmative action b. environmentalism c. consumerism d. entrepreneurship

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ANSWER KEY
1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. D A B A D B C C A B C D C B A C B D A D C D B B C 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48. 49. 50. B C B A C A B D C C C B A D C D B B C B A C B A B 51. 52. 53. 54. 55. 56. 57. 58. 59. 60. 61. 62. 63. 64. 65. 66. 67. 68. 69. 70. 71. 72. 73. 74. 75. C D B A D C B C B A C C D B C D A C D C B B D A A 76. 77. 78. 79. 80. 81. 82. 83. 84. 85. 86. 87. 88. 89. 90. 91. 92. 93. 94. 95. 96. 97. 98. 99. 100. C D B B A C A B C B D D C B C A D B C D B B B A C

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