49997058-BUSN115-MidTerm-StudyGuide-1 - BUSN115 Midterm...

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Unformatted text preview: BUSN115 Midterm Study Guide The BUSN115 midterm exam is 2 pages long. It is a timed exam worth 140 points that you may enter only once. You have 2 hours to complete the exam. It consists of 20 multiple choice questions worth 5 points each. There are 2 essay questions worth 20 points each. Be sure to save and save often while you are working on the exam, but do not submit your exam until you are finished with both pages! To earn full credit for the essay questions, your response to each question should answer the question completely in approximately 2 ± 3 paragraphs. The exam reflects the following course objectives and possible topics: TCO 1: Given a description of a typical business, demonstrate how that business acts within our economic system to achieve its goals as well as those of society, along with an understanding of how the future may impact these goals. y Know how government regulation affects the economy. y Show the relationship of supply and demand as illustrated on supply and demand curves. PG 36 y Define elements of productivity and how it can be increased. The elements of productivity include: y y y Physical capital:human made resources such as tools, buildings, machines Human capital:labour force that possesses skills, education, training Technology:the technical means for the production of goods and services. It is the most important driver of productivity according to some economists. It involves not only major inventions but thousands of small innovations. Productivity may be increased by increasing the physical capital, human capital or technology. Note that there is a term called Diminishing Returns to Physical Capital- which means successive increases in physical capital lead to smaller increases in productivity Read more: http://wiki.answers.com/Q/What_are_the_elements_of_productivity_and_how_is_it_increased#i xzz1CINcM7Yx y Define ³quality of life´. y y y y y y y y y y y y y y Know the similarities and differences between for profit and not-for-profit organizations. Know the role of the US Federal Reserve and what tools they use to implement their policies. Know what a free market economy is and its relationship to the distribution of wealth. Define a socialist economic system. Know how profit is determined for a business. Know who the stakeholders are of a business. Know what constitutes US fiscal policy and how is it used to manage the economy. Define gross domestic product (GDP). Know and explain the ³rights of capitalism´. TCO 2: Given the importance of ethics in business, be able to understand and address ethical dilemmas that may occur in workplace activities and offer suggestions to prevent their recurrence. y y y Be able to define ethics. Know how compliance is related to ethics. W hat some ethical concerns are as described in the text? y y List and explain the steps to be considered when determining the ethics of an action. Know the relationship of ethics and leadership. TCO 3: Given the need to increase profits through cost reductions, describe the use of globalization strategies to accomplish this initiative, along with a discussion of the pros and cons of this approach. y y y y y y y y y Define and apply tariffs, import quotas and subsidies as applied to foreign trade. Know what trade protectionism is. Define a favorable and unfavorable balance of trade. Define exchange rate, and explain floating, pegged and fixed exchange rates. Know what the General Agreement on Tariffs and Trade (GATT) is and its purpose. Know the meaning of currency devaluation. Know what is meant by ³balance of payments´ as related to foreign trade. Explain the advantages of free trade. Define what creditor and debtor nations are. TCO 4: Given understanding of entrepreneurship, be able to describe the major elements necessary for success, along with an understanding of the potential risks associated with starting a business venture. y y y y y y y y y y y y y Describe the forms of business ownership, know how they are used and the advantages and disadvantages of each one. Describe a franchise and know its advantages and disadvantages. Define a business merger. Know the purpose of a limited liability company. Know what advantages a small business may have when entering a foreign countries market. Know why women as a group are successful in franchises. Define a farm cooperative. Know what is the difference between a privately and publicly-owned business. Know reasons why some people become entrepreneurs. Know some of the reasons for the success and failure of small businesses. Define intrapreneur. Know the steps that should be taken in the buying of a franchise. Know about the Small Business Microloan program. What is a Microloan? The Microloan Program provides small, short-term loans to small business concerns and certain types of not-for-profit child-care centers. The SBA makes funds available to specially designated intermediary lenders, which are nonprofit community-based organizations with experience in lending as well as management and technical assistance. These intermediaries make loans to eligible borrowers. The maximum loan amount is $50,000, but the average microloan is about $13,000. How Microloan Funds May Be Used Microloans may be used for the following purposes: y Working capital y The purchase of inventory or supplies y The purchase of furniture or fixtures y The purchase of machinery or equipment. Proceeds from a microloan cannot be used to pay existing debts or to purchase real estate. Technical Assistance Each intermediary (lender) is required to provide business training and technical assistance to its micro-borrowers. If you apply for microloan financing, you may be required to fulfill training and/or planning requirements before your loan application is considered. This business training can be helpful to you as you launch or expand your small business. Terms, Interest Rates, and Fees Loan terms vary according to: y The size of the loan y The planned use of funds y The requirements of the intermediary lender y The needs of the small business borrower The maximum term allowed for a microloan is six years. Interest rates vary, depending on the intermediary lender and costs to the intermediary from the U.S. Treasury. Generally, these rates will be between 8 and 13 percent. Collateral Each intermediary lender has its own lending and credit requirements. Generally, intermediaries require some type of collateral as well as the personal guarantee of the business owner. Contact Your Local Microloan Intermediary Small businesses interested in applying for a microloan should contact an intermediary in their area, since all credit decisions are made on the local level. The Microloan Program is available in selected locations in most states. For more information contact your local SBA District Office or review the attached file for a list of participating intermediaries by state. y y y y Know which business sector offers the most opportunity for profit for an entrepreneur. Know what SCORE is. Know what is considered ³a self-nurturing business person´. Know what the aspects of a limited liability company are. ...
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This note was uploaded on 12/13/2011 for the course BIS 155 taught by Professor Mitchell during the Spring '11 term at DeVry Addison.

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