Question 1

The United States is getting older and less white.

Accepted Answer

According to the U.S. Census Bureau, the proportion of older adults (ages 65 and older) is increasing, and the proportion of non-Hispanic whites is decreasing.

Question 2

An external audit focuses on identifying and evaluating trends and events within the control of management.

Accepted Answer

An external audit focuses on evaluating the financial statements of an organization and providing an opinion on the accuracy and fairness of those statements. It is not concerned with identifying or evaluating trends and events within the control of management; that is the role of internal audit.

Question 3

The I/O approach to competitive advantage advocates that internal factors are more important than external factors in a firm achieving competitive advantage.

Accepted Answer

The I/O (Industrial Organization) approach to competitive advantage advocates that external factors such as industry structure and market conditions are more important than internal factors in a firm achieving competitive advantage.

Question 4

As many managers and employees as possible should be involved in the process of performing an external audit.

Accepted Answer

The more people involved in the external audit process, the more comprehensive the audit can be, and the greater the likelihood of identifying all potential issues or areas for improvement. Including both managers and employees also helps to ensure a more balanced perspective on the company's operations.

Question 5

A low value of the dollar means lower exports and higher imports.

Accepted Answer

The answer of A low value of the dollar means...

Question 6

Much of Europe lingers in a recession.

Accepted Answer

The statement is true. Many European countries have been experiencing economic recession in recent years.

Question 7

Five major categories of external variables are: 
1)economic forces, 2)social, cultural, demographic, and natural environment forces, 3)political, governmental, and legal forces, 4)technological forces and 5)demographic forces.

Accepted Answer

These five categories of external variables are widely recognized and studied in the field of business and economics.

Question 8

Industry analysis is also referred to as external strategic management audit.

Accepted Answer

Industry analysis focuses on analyzing the external factors that affect the business, which is a key component of strategic management audit.

Question 9

Motor vehicle firms in the United States are vulnerable when the value of the dollar falls against the yen and euro.

Accepted Answer

The answer of Motor vehicle firms in the United States...

Question 10

A low value of the dollar benefits the U.S. economy in many ways.

Accepted Answer

A low value of the dollar makes U.S. exports cheaper and more competitive in foreign markets, which can boost exports and create jobs. It also makes it cheaper for foreign investors to invest in the U.S. economy, which can attract more foreign investment.

Question 11

It is predicted that, by 2025, over 18% of the population in the United States will be 65 years or older.

Accepted Answer

This is supported by data from the U.S. Census Bureau, which predicts that the 65+ population will increase from about 56 million in 2020 to over 74 million in 2025, representing 18.1% of the total population.

Question 12

Economic factors do not have much impact on the attractiveness of strategies.

Accepted Answer

Economic factors can have a significant impact on the attractiveness of strategies. For example, a recession can make cost-cutting strategies more attractive while a growing economy can make expansion strategies more attractive. The state of the economy can also impact customer demand, supply chain costs, and competition, all of which can influence the attractiveness of certain strategies.

Question 13

To perform an external audit, a company first must gather competitive intelligence and information about social, cultural, demographic, environmental, economic, political, legal, governmental, and technological trends.

Accepted Answer

This statement is true. Before conducting an external audit, a company needs to gather information about various external factors that could affect its business operations and performance. These factors include competitive intelligence and information on social, cultural, demographic, environmental, economic, political, legal, governmental, and technological trends. Only by understanding these external factors can a company develop strategies to effectively compete and succeed in the marketplace.

Question 14

Remaining solely domestic is an increasingly safer strategy for U.S. companies.

Accepted Answer

Remaining solely domestic may not necessarily be a safer strategy for U.S. companies due to global competition and potential disruptions in domestic markets. Branching out into international markets may diversify a company's revenue streams and provide growth opportunities.

Question 15

By 2075, the United States will have no racial or ethnic majority.

Accepted Answer

According to projections by the US Census Bureau, by 2075, no single racial or ethnic group will constitute a majority in the United States. This trend is driven by the growth of the Hispanic population, projected to reach 24% of the total US population by 2060, as well as projected increases in the Asian and multiracial populations.

Question 16

The aim of an external audit is to develop an exhaustive list of every possible factor that could influence the business.

Accepted Answer

The aim of an external audit is to identify and analyze the external factors that could impact the business, not necessarily every possible factor. It aims to evaluate the opportunities and threats in the external environment that could affect the organization's performance.

Question 17

U.S. households are making more and more purchases online.

Accepted Answer

According to multiple studies and reports, U.S. households are increasingly making more purchases online.

Question 18

An increase in interest rates is directly related to an increase in discretionary income and an increase in the demand for discretionary goods.

Accepted Answer

An increase in interest rates actually results in a decrease in discretionary income as loan payments and interest costs increase. This, in turn, leads to a decrease in the demand for discretionary goods as consumers have less money to spend.

Question 19

External audits attempt to identify key variables that offer actionable responses.

Accepted Answer

External audits are conducted to identify areas of improvement and provide actionable recommendations. Key variables are analyzed to identify strengths, weaknesses, opportunities, and threats, which are then used to develop strategies for improving organizational performance.

Question 20

Freund argues that key external factors must not be hierarchical.

Accepted Answer

The answer of Freund argues that key external factors must...

Quiz 3: The External Assessment