Chapter 1:

1. A business is any activity that seeks to provide goods and services to others
while operating at a profit. True
2. When an entrepreneur takes a risk, the worst risk is the risk:
of losing time and money on a business that may not prove profitable.
3. Outsourcing means contracting with other companies to do some or all of the
functions of a firm, such as production or accounting. True
4. Stakeholders are all of the people who stand to gain or lose by the policies and
activities of a business. True
5. While you may hear about the success stories, keep in mind that many small
businesses fail each year; thus, it takes a brave person to start
a small business or to turn a business around. True
6. There are many laws in Canada that are intended to minimize corruption, and
businesses can flourish when these laws are followed.
Nonetheless, corrupt and illegal activities at some companies do negatively affect
the business community and the economy as a whole. True
7. Provinces and territories that have high taxes and restrictive regulations tend
to drive entrepreneurs out, while areas with low taxes and less
restrictive regulations can attract entrepreneurs. True
8. While the services-producing sector employs almost 78 percent of the

working population, the manufacturing industry employs approximately

__10_ percent of workers.
Chapter 2:
1. The study of how society chooses to employ resources to produce goods and
services and distribute them for consumption among various
competing groups and individuals. Economics
2. In a free market, prices are not determined by sellers; they are determined by
buyers and sellers negotiating in the marketplace. True
3. The government controls all or most of the factors of production in capitalism.
False
4. Socialism may create more equality than capitalism, but it takes away some of
business peoples incentives to work hard, as: Their profits will be heavily taxed

5. One problem with communism is that the government has no way of knowing
what to produce because prices dont reflect supply and demand
as they do in free markets. True
6. Another problem with communism is that it doesnt inspire business people to
work hard, because the government takes most of their earnings. True
7. Canada has a high degree of government involvement in the economy. True
8. The United States exerts a very powerful influence on Canada as our largest
trading partner. True
9. The unemployment rate includes anybody of any age looking for work. False
10. Frictional unemployment refers to those people who have quit work because
they didnt like the job. True
11. The two major economic systems vying for dominance in the world today can
be defined as: Free-Market economies and command economies
12. Gross domestic product (GDP) is the total value of goods and services
produced in a country in a given year. True
Chapter 3:
1. There are several reasons why countries trade with other countries. All

of answers are correct

2. An unfavourable balance of trade, or trade deficit, occurs when the value of
the country's imports is less than that of its exports. False
3. In measuring the effectiveness of global trade, nations carefully follow

two key indicators: Balance of trade and balance of payments

4. The simplest way of going international is to export your goods and services.
True
5. If you are considering a career in global business, export-trading companies
often provide internships or part-time opportunities for students. True
6. Increasingly, economists and trade analysts have come to agree that a high
amount of foreign direct investment in a nation is not necessarily a bad sign. True
7. Foreign direct investment (FDI) is buying permanent property and businesses
in foreign nations. True

8. Protective tariffs (import taxes) are designed to raise the retail price of
imported products so that domestic products will be more competitively priced.
True
9. China is the worlds largest exporter and the largest importer. False
10. China is the largest global consumer of: All of the answers are correct
Chapter 4:
1. Government activities that affect business include: All of the answers are

correct
2. All levels of government collect taxes-income taxes, the GST, sales taxes, and
property taxes. True
3. Crown corporations are companies that are owned by the federal or provincial
governments. True
4. Laws are derived from four sources: All of the answers are correct

5. The whole process of selling publicly-owned corporations is called

privatization. True
6. Taxes have also been used as a method of encouraging or discouraging
taxpayers. (e.g. Smoking) True
7. Taxes are levied from a variety of sources. Income (personal and

business), sales, and _________are the major bases of tax revenue.

Property
8. The second half of fiscal policy involves government spending. The
government spends money in many areas including social programs,
highways, the environment, and so on. True
9. Some government aid is designed to help industries and companies that are
deemed to be very important because they. Are at the cutting edge of technology
10. Contracts are awarded most often to help Canadian businesses even if they
are sometimes more expensive than bids by non-Canadian companies. True
11. Some government sources available to assist Canadian businesses are

All of these answers are correct

Chapter 5:
1. Many people today have few moral absolutes. Many decide situationally
whether its okay to steal, lie, or drink and drive. True
2. Ethics and legality are the same thing. False
3. It can be very easy to maintain a balance between ethics and other goals such
as pleasing stakeholders or advancing in your career. False
4. No matter how well intended a companys ethics code is, it is worthless if

it is not. Enforced
5. A competitive corporate environment: can encourage employees to deceive
customers.
6. More and more companies have adopted written codes of conduct. True
7. Economist Milton Friedman made a classic statement when he said that

the only social responsibility of business is: to make money for

stockholders
8. Not everyone thinks that CSR is a good thing. Some critics of CSR believe
that a manager's sole role is to compete and win in the marketplace. True
9. Ethical problems and issues of social responsibility are not unique to Canada.
True
10. Many businesses are demanding socially responsible behaviour from their
international suppliers by ensuring that suppliers do not violate
domestic human rights and environmental standards. True
11. Fairtrade Canada is responsible for: certifying that Canadian products
bearing the Fairtrade certification mark meet international Fairtrade standards.
Chapter 6:
1. All profits of a sole proprietorship are taxed as the personal income of the
owner, and the owner pays the normal personal income tax on that
money. True
2. Advantages of a sole proprietorship include all of the following, except:

Sharing of company profit

3. A limited partnership is a partnership with one or more general partners and

one or more limited partners. True
4. It is not necessary to be big to incorporate. True
5. A horizontal merger joins two firms in the same industry and allows them to
diversify or expand their products. True
6. A franchise can be formed as a sole proprietorship, partnership, or corporation.
True
7. A co-operative is an organization owned by members and customers who pay
an annual membership fee but do not share in any profits. False
Chapter 7:
1. Entrepreneurial ventures differ from small businesses in which of the

following ways? All of these answers are correct

2. There are no significant differences between the terms entrepreneurship and
small business. False
3. Many home-based businesses are owned by people who are trying to combine
career and family. True
4. Nearly all small businesses are Canadian-owned and managed. True
5. Many of the businesses with the lowest failure rates require advanced training
to start---veterinary services, dental practices, medical practices, and so on. True
6. Which of the following is a way to get intobusiness venture? All

7. In business, a market consists of: people with unsatisfied wants and

needs who have both the resources and the willingness to buy
Chapter 8:
1. Most modern managers emphasize teamwork and co-operation rather than
discipline and giving orders. True
2. Managers of high-tech firms realize that workers often: know much more

about technology than they do

3. Managers look at the big picture, and their decisions make a major difference
in organizations. True
4. Values guide strategic planning through to day-to-day decisions by being
mindful of how all stakeholders will be treated. True
5. Values guide strategic planning through to day-to-day decisions by being
mindful of how all stakeholders will be treated. Strategies developing detailed
statements
6. An organization chart is a visual device that shows relationships among people
and divides the organization's work. True
7. Leaders are motivated by intrinsic values: Needs, desires, motive, and

will power
8. One difference between managers and leaders is that managers strive to
produce order and stability, whereas leaders embrace and manage change. True
9. The whole control process is based on clear standards. Without such
standards, the other steps are difficult. True
10. Controlling consists of five steps. Which is NOT one of those steps?
Communicating results and deviations to the competitors involved
Chapter 9:
1. Fayol: The amount of decision-making power vested in top management
should never vary by circumstances. False
2. Organizing a business begins with: Determining the work to be done
3. The ________________is the line of authority that moves from the top

of the hierarchy to the lowest level. Chain of command

4. By their nature, many organizational structures today are fast and quick to
respond. False
5. Span of control refers to the optimum number of subordinates a manager
supervises or should supervise. True
6. _______________occurs when decision-making authority is maintained

at the top level of management at the company's headquarters.

Centralized authority

7. Functional structure is the grouping of workers into departments based on

similar skills, expertise, or resource use. True
8. Self-managed teams are groups of employees from different departments who
work together on a short-term basis. False
9. Networking is using communications technology and other means to link
organizations and allow them to work together on common objectives. True
10. Real time simply means the present moment or the actual time in which
something takes place. True
11. Any organizational change is bound to cause some stress and resistance
among members. True
Chapter 10:
1. Operations management includes inventory management, quality control, and
production scheduling. True
2. Operations management is a specialized area in management that converts or
transforms resources into goods and services. True
3. Today's business climate is characterized by slow change. False
4. _________________ is the physical arrangement of resources

(including people) in the production process. Facility Layout

5. Facility layout does not depend greatly on the processes that are to be
performed. False
6. ISO 14000 is a collection of the best practices for managing an organization's
impact on the environment. True
7. Form utility is the value added by the creation of finished goods and services,
such as the value added by taking silicon and making computer chips or putting
services together to create a vacation package. True
8. A PERT network can be made up of thousands of events over many months.
True
9. A Gantt chart is a bar graph showing production managers what projects are
being worked on and what stage they are in at any given time. True

Chapter 11:
1. One of the easiest skills of a manager is the ability to induce motivation in
employees so that they will be committed and productive employees. False
2. Safety needs are towards the top of Maslows hierarchy of needs. False
3. According to Maslows hierarchy of needs, social needs refer to the need to
feel loved, accepted, and part of the group. True
4. Herzberg noted further that factors having to do with the job environment were
not considered motivators by workers. True
5. Herzberg asked workers to rank various job-related factors in order of
importance relative to money. False Motivation
6. Job enrichment is a motivational strategy that emphasizes motivating

the worker through ____________. The job itself

7. According to Theory X, primary motivators are fear and money. True
8. According to Theory X, primary motivators are fear and money. Expectancy
theory
9. Goal-setting theory is based on the idea that setting ambitious but attainable
goals can motivate workers and improve performance if the goals are accepted.
True
10. Teamwork does not happen by itself. True
11. Managers cannot use one motivational formula for all employees. True
12. In _________ workers build personal relationships and develop group

trust before focusing on tasks. A high-context culture.

Chapter 12:
1. One reason why human resource management is receiving increased
attention is the major shift from traditional manufacturing industries to service and
high-tech manufacturing industries that require highly technical job skills. True
2. It is true that human resources managers work with people, but they are also
deeply involved in planning, record keeping, and other administrative duties. True

3. Internal sources are often given first consideration. So it's useful to get a
recommendation from a current employee of the firm for which you want to work.
True
4. The greatest advantage of hiring from within is that it helps maintain employee
morale. True
5. Contingent workers are defined as workers who do not have regular, full-time
employment. True
6. Orientation programs include everything from informal talks to formal activities
that last a day or more. True
7. Progressive managers, such as those in many high-tech firms and Internet
companies, are less likely than traditional managers to give specific instructions
to employees. True
8. The third step in the performance appraisal process is to: evaluate
performance
9. Which of the following are ways an employee can move through a company.
All of the answers are correct
10. The Charter of Rights and Freedoms, which is part of the Constitution,
guarantees equality before the law for every Canadian. True
11. Employment equity refers to employment activities designed to increase
employment opportunities for certain groups, given past discrimination toward
these groups. True
Chapter 13:
1. Trade unions claim to be responsible for the establishment of. All of the

answers are correct

2. Critics of organized labour maintain that few of the inhumane conditions that
once dominated industry still exist in the workplace. True
3. The ______________ was established to oversee labour-management
relations. Canada Industrial Relations Board
4. In the collective bargaining process, employers and employees as well as
unions have to follow a strict procedure to ensure that everybody is
playing by the rules. True

5. Today, we are seeing increasing emphasis on skills upgrading as the basis of

job security. True
6. The objectives of unions frequently change because of shifts in social and
economic trends. True
7. __________________ is the use of a third party, who encourages both

sides in a dispute to consider negotiating and often makes suggestions for

resolving the dispute. Mediation
8. The great majority of labour negotiations end successfully without the
disruption of a strike or lockout. True
9. A ____________occurs when workers collectively refuse to go to work.

Strike
10. Givebacks are concessions made by union members to management. True
11. New issues that affect labour-management relations include. All of

these answers
12. Employees today are raising questions about fairness and workplace
benefits. True
Chapter 14:
1. Profit orientation is to focus on those goods and services that will earn the
most profit and enable the organization to survive and expand to
serve more consumer wants and needs. True
2. _____________ consists of all of the techniques sellers use to inform

people and motivate them to buy their goods or services. Promotion

3. Brand name is a word, device (design, shape, sound, or colour), or
combination of these used to distinguish a product from those of competitors.
True
4. The four Ps are a convenient way to remember the basics of marketing, but
they don't include everything that goes into the marketing process. True
5. Normally the least expensive method is to gather information that has already
been compiled by others and published in journals and books or
made available online. True

6. Businesses need information to compete effectively, and marketing research is

the activity that gathers that information. True
7. Environmental scanning is the process of identifying the factors that can affect
marketing success. True
8. Segmentation by age, income, and education level are ways of

________________. Demographic segmentation.

9. The B2B market is smaller than the consumer market. False
10. Business buyers are generally more rational and less emotional than ultimate
consumers. True
Chapter 15:
1. A total product offer is more than just the physical good or service. True
2. An organization cannot do a one-time survey of consumer wants and needs,
design a group of products to meet those needs, put them in the stores, and then
just relax. True
3. A __________________is a brand that has been given exclusive legal

protection for both the brand name and the pictorial design. Trademark
4. Product differentiation is the creation of real or perceived product differences.
Actual product differences are sometimes quite small. True
5. Some products, like crayons and sidewalk chalk, have very long product life
cycles. True
6. Pricing should take into account costs, but it should also include the expected
costs of product updates, the objectives for each product, and
competitor prices. True
7. While marketing intermediaries can be eliminated, their activities cannot if
consumers are to have access to products and services. True
8. Some manufacturers sell directly to buyers. True
9. Products that need ___________________include convenience goods

such as candy, cigarettes, gum, and popular magazines. Intensive

distribution

10. Selective distribution is the use of only a preferred group of the available
retailers in an area. True
11. Internal sales promotion efforts are directed at salespeople and other
customer-contact people to keep them enthusiastic about the company. True
12. Which one of the following is NOT one of the things retailers do as part

of the promotional mix? Market Research

Chapter 16:
1. Its almost impossible to run a business without being able to read,
understand, and analyze accounting reports and financial statements. True
2. You dont really have to know something about accounting if you want to
succeed in business. False
3. _____________________involves working for organizations whose

purpose is not generating a profit but serving ratepayers, taxpayers, and

others according to a duly approved budget. Governmental and not-forprofit accounting.
4. While financial accounting is heavily focused on historical information,
management accounting also provides much forward looking data in the
form of budgets. True.
5. During a period of rising prices, FIFO (first in, first out) inventory valuation
method will result in ________ net income figures than would LIFO (last in, first
out). Higher
6.

Liquidity Ratios
`
Chapter 17:
1. Finance is the function in a business that acquires funds for the firm and manages those funds within the firm.
True

2. _____________________is the job of managing a firms resources so it can meet its goals and objecti
Financial management

3. A(n)
__________________highlights a
firm's spending plans for major
asset purchases that often require
large sums of money.
Capital budgets
4.
Chapter 18:
1. ______________ make(s) a
profit if the revenue generated by
loans exceeds the interest paid to
depositors plus all other operating
expenses.
Commercial banks
2. Most general insurance is provided
by private insurance companies. True
3. A(n) _______________ is a

condensed version of economic and

financial information that a company
must make available to investors
before they purchase the security.
Prospectus
4.
__________________are nonprofit, member-owned financial cooperatives that offer a full variety of
banking services to their members.
Credit unions
5. individuals and corporations that
deposit money in a chequing account
have the privilege of writing personal
cheques to pay for almost any
purchase or transaction. False