Question 1

If Canada fell into a depression, the Bank of Canada would most likely

Accepted Answer

Lowering interest rates is a common policy action taken by central banks during an economic downturn to stimulate lending and spending. This would help to mitigate the effects of a depression in Canada. Increasing gasoline taxes is not directly related to addressing an economic depression and is unlikely to be the Bank of Canada's primary tool for addressing economic issues.

Question 2

What effect do higher interest rates have on consumer spending?

Accepted Answer

Higher interest rates mean that borrowing money becomes more expensive, which leads to decreased consumer spending. Consumers are likely to reduce their spending in order to save money and pay off debts, which impacts businesses and the overall economy.

Question 3

The political-legal environment describes

Accepted Answer

The political-legal environment refers specifically to the relationship between business and government, including laws, regulations, and policies that affect business operations.

Question 4

Which of the following is not an example of a factor in the socio-cultural environment?

Accepted Answer

Economic and political stability are not factors in the socio-cultural environment, but rather in the economic and political environment. The other options all involve cultural or social factors that influence consumer behavior or business operations.

Question 5

If you were the Minister of Finance taking care of fiscal policy, which one of the following could you implement?

Accepted Answer

As the Minister of Finance responsible for fiscal policy, all the options listed (A: tax increase, B: cut in social security programs, C: increase in federal transfer payments, D: increase in spending to military bases) are within the scope of fiscal policy measures. These actions involve government spending and taxation decisions, which are key tools of fiscal policy used to influence a country's economic conditions.

Question 6

The government controls the size of the money supply through ________ policies.

Accepted Answer

The government controls the size of the money supply through monetary policies, such as changing interest rates, adjusting reserve requirements for banks, and engaging in open market operations. Revenue, inflation, economic, and fiscal policies may be related to monetary policy, but they do not directly control the size of the money supply.

Question 7

Companies that continue to act unethically (especially in the area of accounting) will most likely

Accepted Answer

When a company acts unethically, especially in the area of accounting, it can lead to a loss of trust among investors and shareholders. This can result in a decline in the value of their shares as shareholders become wary of the company's financial reporting practices. Investors prefer transparency and honesty, and if they feel that a company is not being truthful in its financial statements, they may be less likely to invest in it or may sell their existing shares, causing the share price to decline. In summary, companies that act unethically are likely to have their shares depreciate in value.

Question 8

Basic research and development describes

Accepted Answer

Basic research and development refers to the process of improving knowledge in a particular area, with the primary focus on increasing the understanding or developing new theories, concepts, or technologies, without any immediate commercial applications. This type of research is typically conducted by universities, research institutions, and private companies to advance the field and create a foundation for future discoveries and innovations. Its main objective is to generate new knowledge and ideas that can eventually lead to practical applications, though this is not the immediate goal.

Question 9

If casinos notice an increase in business due to the fact that many people no longer regard gambling as wrong, this demonstrates a change in the ________ dimension of their external environment.

Accepted Answer

The increase in business due to a change in people's attitudes towards gambling reflects a shift in the socio-cultural dimension of the casino's external environment. Socio-cultural factors refer to prevailing cultural norms, values, beliefs, and behaviors that influence an organization's operations and performance. In this case, the declining social stigma attached to gambling has created a more permissive cultural environment, leading to increased demand for casino services.

Question 10

Research and development (R&D) includes activities that are necessary to provide new products, services, and processes. Two basic types of R&D are

Accepted Answer

The two basic types of R&D are basic and applied. Basic research aims to expand knowledge and understanding of a specific field but does not necessarily have a practical application in mind. Applied research aims to use knowledge gained from basic research to solve practical problems or develop new products, services, or processes.

Question 11

Ethical conduct and social responsibility are critical elements of which environment?

Accepted Answer

Ethical conduct and social responsibility are primarily associated with the socio-cultural environment, as they relate to societal values, norms, and expectations regarding behavior and responsibility.

Question 12

An increase in tax rates is an example of ________ policy, while the government influencing banks to lend more to consumers is an example of ________ policy.

Accepted Answer

An increase in tax rates falls under fiscal policy, which involves changes in government spending and taxation to influence the economy. On the other hand, the government influencing banks to lend more to consumers falls under monetary policy, which involves changes in interest rates and the money supply to influence the economy.

Question 13

The advent of the iPod saw an increase in the downloading of music from the Internet. Music artists are noticing a decrease in the sales of their CDs, which is an effect of which dimension of the external environment?

Accepted Answer

The increase in downloading of music from the Internet is a result of the technological dimension of the external environment, specifically the advancement and popularity of digital music players such as the iPod. This has led to a decrease in sales of CDs for music artists.

Question 14

The major cigarette companies have been experiencing a decline in sales due to the overall decrease in smoking across Canada in recent years. These companies are being affected by which dimension of their external environment?

Accepted Answer

The decrease in smoking is a result of the shift in societal attitudes towards health and wellness, which is a part of the socio-cultural dimension of the cigarette companies' external environment. This has resulted in a decline in sales as fewer people are inclined to purchase cigarettes.

Question 15

The socio-cultural environment describes

Accepted Answer

The socio-cultural environment is defined as the customs, values, attitudes, and demographic characteristics of the society in which an organization operates. It includes elements such as social norms, lifestyle trends, religious beliefs, education level, and ethnicity which significantly impact the behavior and preferences of the individuals in that society. Understanding these factors is a key to effectively manage human resources or adapt business practices to match the needs, tastes, and cultural sensitivities of the target market.

Question 16

________ includes human knowledge, work methods, physical equipment, electronics and telecommunications, and various processing systems that are used in performing business activities.

Accepted Answer

The technological environment includes all the equipment, electronics, processing systems, and knowledge needed to perform business activities. It encompasses both hardware and software, as well as human methods of work. This environment constantly changes and evolves, and companies need to stay up-to-date with the latest advancements to remain competitive.

Question 17

When Microsoft introduced Encarta, it caused the sale of hard copy encyclopedias sold by Encyclopedia Britannica to drop sharply. This is an example of which of Porter's five forces?

Accepted Answer

The answer of When Microsoft introduced Encarta, it caused the...

Question 18

Which of the factors in Porter's five forces model is generally most important?

Accepted Answer

The answer of Which of the factors in Porter's five...

Question 19

Which of the following best describes the breadth of socio-cultural environment factors?

Accepted Answer

The answer of Which of the following best describes the...

Question 20

________ is often cited as a buyer that puts tremendous pressure on its suppliers.

Accepted Answer

Walmart is known for its aggressive purchasing tactics, including leveraging its buying power to negotiate lower prices and placing strict demands on its suppliers. This pressure often leads suppliers to cut costs and improve efficiency in order to meet Walmart's demands.

Quiz 2: The Environment of Business