Business Fundamentals
Exam Materials
Course Introduction
Business Fundamentals provides an introduction to the core principles and practices that drive modern organizations. The course explores essential topics such as management, marketing, accounting, finance, operations, and entrepreneurship, offering students a comprehensive view of how businesses are structured and operate in a competitive environment. Through case studies and real-world examples, students will develop critical thinking and problem-solving skills, gaining foundational knowledge that is applicable across various industries and business functions. This course establishes the groundwork for further study in specialized business areas and empowers students to make informed decisions as future professionals or entrepreneurs.
Recommended Textbook
Future of Business 5th Canadian Edition by Norm Althouse
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Page 2
Chapter 1: Political Environment
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Sample Questions
Q1) The municipal governments are responsible for water, sewers, and waste collection.
A)True
B)False
Answer: True
Q2) What are the four main types of taxes other than income taxes?
A) gas, alcohol, sales, and property
B) excise, property, sales, and alcohol
C) property, payroll, sales, and excise
D) property, payroll, sales, and GST
Answer: C
Q3) A combination of the GST and the PST is referred to as which of the following?
A) combined tax
B) joint sales tax
C) goods and provincial tax
D) harmonized tax
Answer: D
Q4) Why was the Competition Act established?
Answer: To protect consumers from things like conspiracies, monopolies, and mergers.
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Chapter 2: Economic Environment
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Sample Questions
Q1) When a single company accounts for 100 percent of industry sales, it is an example of which type of market structure?
A) a pure monopoly
B) an oligopoly
C) monopolistic competition
D) imperfect competition
Answer: A
Q2) In PEI, jobs are plentiful during the summer months, but difficult to find in September once the tourists leave and many restaurants and inns close. People who work in the island's restaurants annually become unemployed in which way?
A) structurally
B) geographically
C) frictionally
D) seasonally
Answer: D
Q3) What is the term used to describe what is happening when the government spends more on public transportation, and as a result, individuals spend less on private transportation?
Answer: crowding out
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Page 4
Chapter 3: Social Environment
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Sample Questions
Q1) Today, a person could be a banker, vegetarian, mountain banker, single father, and rock music fan; this is an example of which of the following?
A) growing consumer advocate
B) complex lifestyle
C) personal transition
D) component lifestyle
Answer: D
Q2) Which term represents all of the individuals or groups to whom a business has a responsibility?
A) stakeholders
B) lobby groups
C) shareholders
D) consumers
Answer: A
Q3) Older consumers are best described by which of the following?
A) They have part-time employment to add to their incomes.
B) They are the most significant group with respect to their consumerism.
C) They enjoy spending freely in their retirement years.
D) They are reluctant to spend money unless they can make cash purchases.
Answer: A
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Chapter 4: Technological Environment
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Sample Questions
Q1) A knowledge worker is an employee who captures, codifies, and transfers knowledge across organizations for competitive advantage.
A)True
B)False
Q2) Which of the following refers to the practical application of knowledge?
A) a transaction system
B) smartphone apps
C) a data-processing system
D) technology
Q3) Which of the following is NOT one of the activities that businesses monitor through technology?
A) worker productivity
B) email
C) production schedules
D) daily sales
Q4) Canada has shifted from an industrial society to an export-based economy.
A)True
B)False
Q5) What is information technology (IT)?
Q6) Different technology systems can cause a problem in which aspect of businesses?
Page 6
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Chapter 5: International Environment
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Sample Questions
Q1) In 1997, Russia and Ukraine exported carbon steel plate into Canada at a price much lower than the countries charged for the identical steel in their home markets. Russia and Ukraine were engaged in which of the following activities?
A) add-on pricing
B) dumping
C) unloading
D) export pricing
Q2) According to the principle of comparative advantage, each country should specialize in the products that it can produce most readily and cheaply and trade those products for products that foreign countries can produce most readily and cheaply.
A)True
B)False
Q3) What is a natural barrier that faces Argentina when it sells beef to Siberia?
A) exchange controls
B) custom regulations
C) distance
D) government controls
Q4) What term has the opposite meaning from "protectionism"?
Q5) How does an infrastructure influence a country's economic development?
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Chapter 6: Entrepreneurship and Small Business
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Sample Questions
Q1) What is one way to ease the burden of managing a business?
A) operate the business 20 hours a week
B) hire outside consultants
C) do all the work oneself and hire no employees
D) keep minimal inventory on hand
Q2) Which of the following is financing obtained from investment companies that specialize in financing small, high-growth companies and receive an ownership interest and a voice in management in return for their money?
A) equity financing
B) entrepreneurial capital
C) venture capital
D) debt financing
Q3) Which of the following is NOT a common cause of most business failures?
A) economic factors
B) financial causes
C) personnel problems
D) owner's lack of experience
Q4) What is the most common reason that an individual leaves a secure job to start his or her own company?
Q5) List reasons that small businesses thrive in Canada.
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Chapter 7: Understanding the Business
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Sample Questions
Q1) Companies are more likely to earn good publicity over the long run if they are which of the following?
A) good stewards of the environment
B) large donors to a charity
C) big sponsors of a community event
D) politically active
Q2) Small business owner Barry Shain has always paid all of his current bills on time. However, this year he has more bills coming due than normal. Which type of ratio would help him evaluate whether he is likely to have enough cash to continue meeting his obligations over the next year?
A) liquidity ratio
B) managerial ratio
C) leverage ratio
D) profitability ratio
Q3) A large sector of the Canadian economic activity is in the commodity industries, and often having a positive impact on the environment by extracting, refining, and transporting these commodities.
A)True
B)False
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Page 9
Chapter 8: Forms of Business Ownership
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Sample Questions
Q1) The two types of cooperatives are wholesale and retail.
A)True
B)False
Q2) List the three major categories of business ownership.
Q3) Which of the following is an area of boomer-driven franchise growth.
A) travel
B) condominiums
C) eldercare
D) wheelchairs
Q4) Which of the following statements best describes cooperatives?
A) Cooperatives have the same liabilities as partnerships.
B) Cooperatives have a limited life span.
C) Cooperatives cannot legally compete with taxable entities.
D) Cooperatives increase their members' buying power.
Q5) Which of the following is created when two or more companies form a special entity to undertake a specific project, usually for a specific period of time?
A) a cooperative
B) a limited-time partnership
C) a general partnership
D) a joint venture
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Chapter 9: Management and Leadership in Todays Organizations
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Sample Questions
Q1) What is the first step in making a nonprogrammed decision?
Q2) What does leadership include?
A) measuring performance against standards
B) departmentalizing work segments
C) monitoring goals
D) guiding others to achieve specific goals
Q3) Which of the following functions of management involves resolving conflicts?
A) organizing
B) leadership
C) controlling
D) planning
Q4) Which of the following represents an organization's general purpose or reason for existence?
A) tactic
B) concept
C) mission
D) corporate culture
Q5) What basic type of management is typically performed by middle managers?
Q6) What are global management skills?
Q7) Define organizing as a process of management. Page 11
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Chapter 10: Designing Organizational Structures
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Sample Questions
Q1) A company that uses departmentalization groups jobs under the authority of one manager for the purposes of planning, coordination, and control.
A)True
B)False
Q2) What is a structure in which authority and responsibility are held by a group of workers rather than a single manager?
A) subordinated
B) committee
C) matrix
D) functional
Q3) At its simplest level, an organization engaged in reengineering is doing what?
Q4) The purpose of reengineering is to make an organization compliant with changes in its legal environment.
A)True
B)False
Q5) An example of a staff position would be the job of district sales manager with 20 people working for him.
A)True
B)False
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Chapter 11: Motivating Employees
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Sample Questions
Q1) What was the primary flaw in Frederick Taylor's scientific management?
Q2) In many companies, workers are trained by assigning them to several different jobs over a period of time. What is this regular shifting of assignments called?
A) job expectancy
B) job enrichment
C) job integration
D) job rotation
Q3) According to Maslow's hierarchy of needs, the most basic needs are the social needs.
A)True
B)False
Q4) What style of manager tells people what to do, is very directive, likes to be in control, and shows little confidence in his or her employees?
Q5) Feedback is very important to the successful application of the goal-setting theory. A)True
B)False
Q6) What are the other names for Herzberg's job satisfiers and job dissatisfiers?
Q7) How can managers use the equity theory to improve worker satisfaction?
Page 14
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Chapter 12: Managing Human Resources and Labour Relations
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Sample Questions
Q1) Lower-level workers, such as machinists and assembly-line workers, are usually paid salaries.
A)True
B)False
Q2) What is the settling of a labour-management dispute by having a third party make a binding decision?
A) mediation
B) conciliation
C) dispute regulation
D) arbitration
Q3) CMI International, a composite plastic manufacturer, wants to improve its involvement with the community, so it has established a community involvement office. To fill the positions within this office, the company will attempt to find and attract qualified applicants from the external labour market. What is this process called?
A) employee investiture
B) qualifying
C) recruitment
D) labour pool development
Q4) List the three major functions of the local union.
Page 15
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Chapter 13: Marketing
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Sample Questions
Q1) The categories of heavy, moderate, and light users have to do with which type of segmentation?
A) psychographic
B) benefit
C) demographic
D) volume
Q2) Which of the following is NOT one of the four Ps?
A) product
B) price
C) presentation
D) place
Q3) The condition of having beliefs or knowledge that are internally inconsistent or that disagree with one's behaviour is known as cognitive dissonance.
A)True
B)False
Q4) Relationship marketing is a strategy that focuses on forging long-term partnerships with customers.
A)True
B)False
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Chapter 14: Creating Marketing Strategies
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Sample Questions
Q1) What are the two classifications of business products?
Q2) A rapidly growing segment of the distribution industry in which a manufacturer or supplier turns over the entire function of the supply chain to an independent third party is known as which of the following?
A) outbounding
B) parcelling supply chain
C) off shooting distribution
D) contract logistics
Q3) If a product survives the introductory stage of the product life cycle, it advances to the maturity stage.
A)True
B)False
Q4) The process of breaking large shipments of similar products into smaller, more usable lots is known as breaking bulk.
A)True
B)False
Q5) Imagine a friend has told you that he had been hired to be a logistics manager. At what three points in the distribution process would he interact with the product?
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Chapter 15: Achieving World-class Operations Management
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Sample Questions
Q1) Define total quality management.
Q2) A flexible manufacturing system is a production system that can be easily changed from continuous to repetitive to intermittent.
A)True
B)False
Q3) Computer-aided manufacturing uses computers to perform which of the following tasks?
A) design new programs
B) design new products
C) modify products
D) develop and control production processes
Q4) When an operations manager has purchased raw material or component parts on the Internet, he or she is engaging in which of the following?
A) e-tailing
B) Internet purchasing
C) computer-assisted buying
D) e-procurement
Q5) List two commonly used techniques for streamlining a business's production.
Q6) What is the relationship between mass production and customization?
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Chapter 16: Accounting for Financial Success
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Sample Questions
Q1) Current assets are listed in a particular order. What is the listing order based on?
A) value
B) net worth
C) liquidity
D) life span
Q2) The income statement is a snapshot of the company's financial position at a certain point in time.
A)True
B)False
Q3) What are amounts owed to the company by customers who bought goods and services on credit?
A) notes payable
B) owners' equity
C) marketable receivables
D) accounts receivable
Q4) The usual expression of the accounting equation is Assets = Liabilities + Owners' Equity.
A)True
B)False
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Chapter 17: Understanding Money and the Canadian Financial System
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Sample Questions
Q1) Which type of bond is an example of a secured bond?
A) premium bond
B) debenture bond
C) mortgage bond
D) indenture bond
Q2) What is the primary securities market?
A) place to trade bonds
B) market in which new securities are sold to the public
C) central location where securities are traded
D) location for buying and selling primary futures
Q3) The Canadian Deposit Insurance Corporation insures deposits in commercial banks. The CDIC was created as one of which of the following institutions?
A) insurance company
B) crown corporation
C) finance company
D) national bank
Q4) A brokerage company is an example of a depository financial institution.
A)True
B)False
Q5) What are the two primary types of securities exchange?
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Chapter 18: Finance
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Sample Questions
Q1) What are short-term investments that are easily converted back to cash and are used by financial managers to achieve higher returns than those offered by chequing accounts?
A) corporate securities
B) marketable securities
C) management vehicles
D) corporate equities
Q2) What is the major drawback to debt financing?
Q3) The financial manager's goal is to collect money owed to the company as quickly as possible while offering customers credit terms attractive enough to do which of the following?
A) increase sales
B) keep existing customers
C) have enough cash flow
D) prevent write-offs
Q4) A basic principle in finance holds that the higher the risk, the greater the return required. This is known as the risk-loss trade-off.
A)True
B)False
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