BUSINESS MANAGEMENT AND ADMINISTRATION CLUSTER EXAM

1. One of the main functions of the legal procedure is to
A. establish laws.
B. enact legislation.
C. resolve disputes.
D. dissolve businesses.

C

2. Marsha wants to invest her savings in a business. However, she wants to protect all of her personal
assets. Which type of business ownership would be most appropriate for Marsha?
A. Sole proprietorship
B. Franchise
C. Partnership
D. Corporation

D

3. Which of the following statements regarding company policies is true:
A. Company policies identify general company rules.
B. Company policies and procedures are the same thing.
C. Company policies describe emergency measures.
D. Company policies identify very specific employee actions.

A

4. Before an individual can follow verbal directions, s/he must first be ready to
A. listen.
B. write.
C. speak.
D. understand.

A

5. What is important to do when giving verbal directions to make sure the audience understands?
A. Maintain eye contact
B. Ask questions
C. Use gestures
D. Explain information

B

6. It is most appropriate for business people to use complex, technical jargon when they are
A. introducing a friend to a business associate.
B. greeting new customers.
C. speaking with coworkers.
D. informally conversing with an acquaintance.

C

7. You have a customer on the phone who always ends up talking about his personal life for far too long.
Today, he's telling you a long story about his recent vacation. However, you have several other calls on
the line and tons of work to do. How should you handle this situation?
A. Tell the customer you don't have time to talk about personal issues, so he should stay on topic.
B. Tell the caller you're happy to hear about his vacation, but you have to take another call.
C. Transfer the call to someone else who has more time to talk to the customer.
D. Talk to the customer as long as he wants to appear more interested.

B

8. When participating in group discussions, it is often helpful to
A. appoint a leader.
B. try to socialize.
C. interrupt a speaker.
D. be aggressive.

A

9. What should a business employee do before writing an informational message?
A. Identify the audience
B. Plan a response
C. Wait for feedback
D. Select the medium

A

10. Which of the following are characteristics of a well-written executive summary:
A. Error free, simple, and creative
B. Clear, concise, and error free
C. Creative, concise, and informal
D. Concise, informal, and error free

B

11. What information should be included in the recommendations section of an analytical report?
A. Benefits and risks
B. Product characteristics
C. Budgetary constraints
D. Project status data

A

12. Which of the following statements would be placed in the introductory section of a research report:
A. The purpose of this study is to determine why sales have been decreasing for three consecutive
quarters.
B. Based on the previously stated findings, it is recommended that the XYZ Company revise its
operating budget.
C. The survey consisted of 250,600 respondents from the northern region of the country.
D. The statistics indicate that the business is losing up to 15% of its market share to new
competitors

A

13. Alex is very skilled in building positive customer/client relations because he can express himself without
offending others. Alex would be described as having
A. tact.
B. integrity.
C. character.
D. generosity.

A

14. Kate's coworker Jack is meeting with a very important German client tomorrow. Kate has been to
Germany several times, and tells Jack that German business people tend to be very formal and serious in
business situations. After learning this information, Jack now knows that he should avoid
A. using titles.
B. using humor.
C. shaking hands.
D. making eye contact.

B

15. Interpreting business policies to customers is usually easier if the business has created a ____________
atmosphere.
A. remote
B. distant
C. friendly
D. superior

C

16. Combining steel, glass, and other raw materials into a vehicle is an example of __________ utility.
A. time
B. place
C. form
D. possession

C

17. Monica has always loved to work with preschool children. She would like to open a day care center in her
area. However, she does not have enough capital saved at this time. What business activity should
Monica address first?
A. Accounting
B. Information management
C. Financial analysis
D. Marketing

C

18. "Brain drain" occurs when
A. a country loses talented employees to better opportunities overseas.
B. consumers spend too much time shopping online.
C. businesses outsource jobs to other countries.
D. people who speak different languages try to communicate with each other.

A

19. Which of the following will foster a business's ability to adapt to changing markets:
A. Authoritarian leadership
B. Reactive management
C. Proactive management
D. Conservative leadership

C

20. Which of the following is most likely to be a result of competition:
A. Development of new products
B. Reduction in product quality
C. High prices
D. More monopolies

A

21. Which of the following is a negative effect on businesses of government regulation:
A. The use of resources is regulated.
B. Unfair trade practices are prohibited.
C. Additional expense and inefficiency are experienced.
D. Patents, trademarks, and copyright protection are provided.

C

22. What organization helps union locals to become established, recruit new members, and negotiate with
management?
A. Shop stewards
B. Federal government
C. National union
D. National Labor Relations Board

C

23. To calculate total revenue, a business multiplies the number of units sold by
A. average price per unit.
B. marginal revenue.
C. fixed costs.
D. marginal costs.

A

24. The United States' business culture tends to embrace self-reliance and personal accomplishment, which
are characteristics of
A. an individualist society.
B. the concept of collectivism.
C. a long-term orientation.
D. a team-oriented mindset.

A

25. During a meeting with German business people, an American businessperson introduced a change to the
agenda. Because the German business people were caught off guard by this change, they became upset,
which indicates that German culture tends to
A. have a low tolerance for uncertainty.
B. be highly ethnocentric.
C. take greater risks than other cultures.
D. prefer a less-structured environment.

A

26. Because Costa Ricans do not like to be kept waiting, it is important for business people to
A. arrive at meetings on time.
B. schedule frequent meeting breaks.
C. discuss business during lunch.
D. comply with local ordinances.

A

27. Which of the following is an example of a Saudi Arabian custom that relates to gender:
A. Friday is the day of rest.
B. Women are not permitted to drive a car.
C. The "thumbs up" symbol is offensive.
D. It is illegal to eat pork.

B

28. A businessperson offended a foreign client when s/he continuously made an insulting gesture. As a
result, the client severed ties with the businessperson's company. This situation could have been avoided
if the businessperson had
A. made an effort to learn the country's language before the meeting.
B. asked the client why s/he was upset during the meeting.
C. taken the time to learn about the client's culture before the meeting.
D. sent a letter of apology to the country's ambassador after the meeting.

C

29. Refusing to do things you really don't want to do is __________ your self-esteem.
A. not good for
B. harmful to
C. of no help to
D. good for

D

30. As the manager of her own company, Brooke is able to guide the company and its employees in a
desired manner. Brooke possesses the trait of
A. leadership.
B. creativity.
C. empathy.
D. initiative.

A

31. What is often a positive result of accepting responsibility for a poor decision?
A. You reinforce skeptical attitudes.
B. You control others' opinions.
C. You demonstrate self-importance.
D. You gain others' respect.

D

32. To manage their work commitments in a timely manner, business people should
A. estimate the time that it takes them to perform their tasks.
B. ask their coworkers to help them with routine activities.
C. work on enjoyable tasks before tackling the unpleasant tasks.
D. identify shortcuts that they can take get their work done quickly.

A

33. As a new employee, you receive constructive criticism about your job performance. This criticism is
designed to
A. improve your ability to do the job.
B. show your lack of ability.
C. hurt and discredit you.
D. demonstrate the supervisor's superior job knowledge.

A

34. Effective managers involve employees in planning changes because people who help to initiate changes
are usually more __________ to those changes.
A. resigned
B. receptive
C. resistant
D. indifferent

B

35. During a negotiation, a non-verbal behavior that indicates a negotiator's high level of confidence is
A. foot tapping.
B. direct eye contact.
C. arm crossing.
D. defensive facial expression.

B

36. Which of the following is an indication that employees might be experiencing a lot of stress:
A. Drinking one or two cups of coffee a day
B. Being irritated when dealing with customers
C. Concentrating on doing the job correctly
D. Having occasional conversations with coworkers

B

37. Henry's been at his current job for five years. He doesn't really like it but doesn't want to look for a new
job because he's so used to this one. Henry avoids adapting because of
A. fear.
B. contentment.
C. lack of control or trust.
D. a desire for change.

B

38. Naya truly cares about her coachee, Jamie, and she wants Jamie to succeed. Which of the following
coaching characteristics does Naya illustrate:
A. Positivity/Enthusiasm
B. Humility
C. Flexibility
D. Genuine concern for others

D

39. How does empathy help coworkers to be fair to each other?
A. Empathy gives coworkers the ability to learn a job quickly.
B. Coworkers with empathy are better able to understand others.
C. Coworkers with empathy are not likely to have disagreements.
D. Empathy helps coworkers to understand legal guidelines.

B

40. For an investment to yield positive results at the end of the investment period, the earnings should
A. grow by at least ten percent.
B. exceed the rate of inflation.
C. be accrued on a debt security.
D. be documented appropriately.

B

41. Regular credit accounts are sometimes called open accounts because they allow
A. first-time credit users to buy without having a credit check.
B. credit users to buy at any time during a set period.
C. credit users to make minimum payments any time during the month.
D. long-time credit users to make purchases without finance charges.

B

42. What do many individuals establish when planning for future financial needs?
A. Living will
B. College fund
C. Emotional intelligence
D. A work history

B

43. Ian's employer electronically places Ian's paycheck directly into his bank checking account every pay
period. In what column on Ian's bank statement will he find these transactions?
A. Deposits and debits
B. Withdrawals and debits
C. Deposits and credits
D. Withdrawals and credits

C

44. Which of the following is the most likely action that the government takes when a person misses the
deadline for filing his/her income tax return:
A. Penalty
B. Refund
C. Extension
D. Allowance

A

45. The section of the marketing plan that should address where the business will be located is the
__________ section.
A. promotion
B. price
C. product
D. place

D

46. Two employees used a business's computerized accounting system to change some records. They were
able to steal $50,000 from the business because the accounting system lacked which of the following:
A. Protection from theft and fraud
B. An affordable price
C. A manual system as backup
D. Printed financial statements

A

47. An estimate of a business's income and expenses for a specified period of time is a(n)
A. income statement.
B. report.
C. balance sheet.
D. budget.

D

48. What is an indicator of strong organizational ethics?
A. Refusal to accept responsibility
B. Over promising
C. Under performing
D. High trust and mutual respect

D

49. A computer program that captures the knowledge of experienced workers is known as a(n)
A. expert system.
B. intranet.
C. spreadsheet.
D. decision support system.

A

50. Because Robert is up for a promotion and wants to impress his manager, he will not share with his
coworkers the tacit knowledge that helps him efficiently perform his job. Robert's reason for not sharing
the information relates to
A. inevitable disclosure.
B. personal gain.
C. privacy issues.
D. group cohesiveness.

B

51. What do companies often use to assign and track various business tasks?
A. Surveillance system
B. Customer database
C. Accountability matrix
D. Magnetic cards

C

52. Corsica Steel Mill has developed a new process to reduce the time it takes to complete a phase of
production. To legally protect this new process from unauthorized use, the company should obtain a
A. trade name.
B. copyright.
C. trademark.
D. patent.

D

53. The belief that profitable sales volume will result from giving customers quality products at fair and
reasonable prices is part of the
A. consumers' movement.
B. planning process.
C. marketing mix.
D. marketing concept.

D

54. Which of the following is the most efficient tool for gathering external information that businesses need:
A. Internet
B. Library
C. Software
D. Textbooks

A

55. Which of the following types of information should a business keep on file indefinitely:
A. Cancelled checks
B. Federal income tax returns
C. Invoices
D. Credit card statements

B

56. Information management can be a challenge because the business world is
A. completely dependent on paper files.
B. suffering from a lack of information.
C. not open to new technology.
D. constantly changing.

D

57. The capability of combining graphics, text, animation, and sound is a unique characteristic of
__________ software programs.
A. electronic
B. communication
C. numeric
D. presentation

D

58. Which of the following functions in a spreadsheet software program allows the computer user to change
the format of the data from ascending to descending order:
A. Replace
B. Chart
C. Consolidate
D. Sort

D

59. Project-management software can help business people allocate necessary resources and
A. authorize payments.
B. hire contractors.
C. establish credit.
D. schedule tasks.

D

60. Dale stores his customer records in a remote database that he accesses via the Internet. Where does
Dale maintain his customer files?
A. In the cloud
B. On his hard drive
C. On a flash drive
D. In a log file

A

61. Why is it important for businesses to interpret statistical findings?
A. To develop charts and tables
B. To obtain useful information
C. To calculate frequency distributions
D. To organize a database

B

62. Plastico Manufacturing Company had to temporarily shut down one of its factories because it was
emitting toxic chemicals into the air. Plastico was not complying with the community's
A. environmental regulations.
B. construction codes.
C. administrative policies.
D. estate laws.

A

63. Which of the following is a true statement about safety hazards in the workplace:
A. Ongoing equipment maintenance prevents most hazards.
B. Safety hazards are obvious to most people.
C. Safety hazards are the same for most businesses.
D. Poor housekeeping can cause safety hazards.

D

64. What must be determined before the work effort can be coordinated effectively?
A. The employees' requirements
B. Technical changes
C. Customer-satisfaction levels
D. The necessary tasks

D

65. Project management can benefit greatly from user-generated, user-updated websites called
A. encyclopedias.
B. forums.
C. wikis.
D. flash drives.

C

66. What should you develop during the process of identifying the people who have the skills that are needed
to complete the project?
A. Status report
B. Sponsor list
C. Realistic budget
D. Job description

D

67. One of the first steps that a business usually takes to develop a project plan is to
A. identify needed resources.
B. prepare purchasing plans.
C. recruit new employees.
D. organize training classes.

A

68. Isabelle asks Todd, one of her project-team members, if he has collected all of the information that he
needs to start tabulating a survey. What project-management activity is Isabelle performing?
A. Monitoring
B. Initiating
C. Coordinating
D. Assigning

A

69. A business that wants to maintain positive, long-term relationships with its vendors should
A. develop a competitive orientation.
B. share relevant information.
C. automate ordering processes.
D. request volume discounts.

B

70. Elaine, a buyer for a large retail chain, places a paper-goods order with Sheets Paper Company, one of
five paper suppliers she uses, because Sheets has the best prices and can ship the order tomorrow. This
is an example of a(n) ___________ order.
A. blanket
B. open
C. prepaid
D. standing

B

71. Why does a business keep stock on hand for resale?
A. So it can produce manufactured goods.
B. To sell it to end users
C. To use it in business operations
D. So it can buy raw materials.

B

72. Silence is an effective negotiating technique to use with a vendor when a business wants the vendor to
A. make a concession.
B. maintain its authority.
C. obtain leverage.
D. initiate a gridlock.

A

73. One of the benefits of production to consumers is that production
A. provides a way to be competitive.
B. provides a way to earn profits.
C. makes use of automation.
D. creates form utility.

D

74. Another term for quality is
A. non-conformance.
B. adequacy.
C. mediocrity.
D. excellence.

D

75. Which of the following is an area often used by customers that a business must maintain on a regular
basis:
A. Employee lounge
B. Corporate office
C. Exterior sidewalk
D. Storage facility

C

76. A comprehensive report reveals that the Sabin Company can increase its data-entry outputs by 20% in a
six-month period by installing the MMX software system. Sabin can use this type of business analysis to
determine
A. how to increase its efficiency.
B. how to detect a problem.
C. why it should obtain new markets.
D. why it should evaluate work schedules.

A

77. Which of the following statements about creativity in marketing occupations is true:
A. Creativity is applicable to working with things rather than with people.
B. Creativity is not important for most marketing jobs.
C. Opportunities to be creative are limited to advertising and display.
D. Almost all marketing occupations involve creativity to some extent.

D

78. John frequently lists or ranks the things he needs to do in the order of their importance. John is
__________ his activities.
A. categorizing
B. prioritizing
C. grouping
D. classifying

B

79. Kate works closely with all the company's departments to develop computer software programs that
enhance the business's ability to communicate and obtain data. Kate works in the area of
A. marketing communications.
B. corporate management.
C. insurance and risk management.
D. business information technology.

D

80. Which of the following characteristics are necessary for entrepreneurs to be successful:
A. Creativity and innovation
B. Determination and aggression
C. Optimism and risk aversion
D. Timidity and organization

A

81. When preparing an interview follow-up letter, what might applicants include that they forgot to mention
during the interview?
A. Position description
B. Social Security number
C. Personal background
D. Important information

D

82. One of the reasons why networking is so effective is because the contacts often
A. know how to communicate with others.
B. are interested in the same position.
C. have information about job skills.
D. work at the company that is hiring.

D

83. What tends to increase when all employees follow the company's rules of conduct?
A. Inflexible attitudes
B. Laissez-faire leadership
C. Subculture power conflicts
D. Organizational cohesiveness

D

84. Sally is a production-line worker who is experiencing problems with the production equipment. Following
the appropriate chain of command, Sally should report the problem to
A. Tom, the production-section manager.
B. Sylvia, the vice president of operations.
C. Jim, the production-line supervisor.
D. Linda, the operations manager.

C

85. Which of the following provides the foundation for a business's overall planning and controlling activities:
A. Organizational goals
B. Profit margins
C. Ordering procedures
D. Product objectives

A

86. What do managers need to do to help employees understand their specific responsibilities in achieving
the organization's goals?
A. Develop a mission statement
B. Communicate priorities
C. Create work subcultures
D. Collect information

B

87. In which component of the project's statement of work (SOW) would the following message most likely
appear: "Due to the limited amount of time allocated to complete the study, the survey sample size may
need to be reduced."
A. Benefits
B. Purpose
C. Constraints
D. Deliverables

C

88. Isabelle is developing a document that divides a long-term project into meaningful subprojects and tasks,
which she will use to guide the workflow. Isabelle is developing the
A. work breakdown structure.
B. project status report.
C. data interchange program.
D. technical operating system.

A

89. During a weekly status meeting, Tom said, "We've worked extremely hard and have made some
tremendous progress on this stage of the project, so I am taking the team out to lunch next Wednesday."
What project-management activity is Tom performing?
A. Rewarding
B. Mentoring
C. Evaluating
D. Encouraging

A

90. Releasing equipment, materials, and team members are tasks that are completed during the
___________ phase of a project.
A. closing
B. scheduling
C. planning
D. initiating

A

91. What is a necessary component of quality-assurance activities?
A. Systematic process
B. Product innovation
C. Classified information
D. Supplier input

A

92. The Six Sigma quality management framework involves monitoring improvement processes by analyzing
A. quantitative information.
B. technology needs.
C. expansion plans.
D. employees' policies.

A

93. A potential benefit to businesses that implement continuous quality improvement processes is
A. increased costs.
B. increased sales.
C. decreased outputs.
D. decreased profits.

B

94. How can a business reduce risks that are associated with a poor public image:
A. Implement an ethics program
B. Maintain minimal inventory levels
C. Encourage fraudulent behavior
D. Offer credit to few customers

A

95. What type of risk-management technology can track individual traders' risk limits and notify management
immediately if any trader exceeds her/his preset limit?
A. Automated oversight
B. Stress testing
C. Data aggregation
D. Corporate governance

A

96. Risk retention groups are typically only allowed to offer __________ insurance coverage.
A. life
B. liability
C. homeowners
D. health

B

97. The process of managerial planning typically helps to
A. guarantee positive results.
B. improve interpersonal relationships.
C. influence employees' adaptability.
D. maximize resource efficiency.

D

98. Which of the following is the management function that focuses on matching the appropriate person with
the necessary skills for a specific job:
A. Leading
B. Interviewing
C. Coordinating
D. Staffing

D

99. What management function involves motivating and encouraging an employee?
A. Planning
B. Directing
C. Organizing
D. Recruiting

B

100. Inspecting raw materials before using them to produce finished goods is an example of ___________
control.
A. standard
B. concurrent
C. feedback
D. feed forward

D