ICS 200 Quiz 2 Study Guide
ICS 200 Quiz 2 Study Guide ICS 200
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This 9 page Study Guide was uploaded by Tatum Notetaker on Thursday September 29, 2016. The Study Guide belongs to ICS 200 at DePaul University taught by Paul Kessenich in Summer 2016. Since its upload, it has received 42 views. For similar materials see Introduction to Business in Business at DePaul University.
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Date Created: 09/29/16
ICS 200 Quiz 2 Study Guide CHAPTER 20 What is money? Anything that people generally accept in return for goods and services What are the five Portability, Divisibility, Stability, characteristics of useful Durability, and Uniqueness money? What are “Bitcoins”? A digital version of money What is the money supply, The money supply is the and why is it important? amount of money the Federal Reserve Bank makes available to people How does the Federal They determine how much Reserve control the money money they need to make, supply? Reserve Requirement, Open- Market Operations, and the Discount Rate What are the major Major functions: putting money functions of the Federal into the market or taking it out, Reserve? What other increasing or decreasing functions does it perform? interest rates It also buys and sells foreign currency, regulates various types of credit, supervises banks, and collects data on the money supply and other economic activity Why did the US need a Cash shortage in 1907 led Federal Reserve Bank? finally to the final version of the Federal Reserve System, because it was able to lend money to other banks What are the differences Banks are for-profit among banks, savings and organizations that receives loan associations, and deposits from customers and credit unions? then uses those funds to make loans Savings & Loan Associations accepts checking and savings deposits and provides home mortgage loans (they were created to promote land ownership) Credit Unions are nonprofit organizations that offers many different financial services beyond storing money What is a consumer finance A company that offers short- company? term loans at high interest rates to those who can’t meet the credit requirements of other institutions What are some of the Some blame the Fed because it causes for the banking kept the cost of loans low, crisis that began in 2008? Congress for promoting questionable loans, and some blame the banks because they made the loans What is the role of the To make sure that should a FDIC? bank fail, each account would be able to be transferred or reimbursed up to $250,000 How does a debit card Debit cards: more like paying differ from a credit card? with a check, automatically takes money out of your account and transfers it Credit cards: costs more money to transfer because there’s paperwork to process, more like promising to pay money at a later time and collects interest What is the World Bank and The bank responsible for what does it do? financing economic 2 development; lends money to developing nations to improve their quality of life and standard of living What is the IMF and what International Monetary Fund; does it do? fosters cooperative money policies among nations and promotes exchange of currencies CHAPTER 4 What are ethics? Ethics: the standards of moral behavior; behaviors that are accepted by society as right vs. wrong How do ethics differ from Sometimes what is legal may legality? not seem really ethical When faced with ethical Is it legal? dilemmas, what questions Is it balanced? can you ask yourself that How will it make me feel about might help you make myself? ethical decisions? What are compliance-based Compliance-based ethical and integrity-based ethical code: emphasize preventing codes? unlawful behavior by increasing control and by penalizing wrongdoers Integrity-based ethical code: define the organization’s guiding values, create an environment that supports ethically sound behavior and stress a shared accountability What are the six-steps to Top management must adopt follow in establishing an and support a corporate code effective ethics programs in of conduct a business? Employees understand that 3 senior management expects them to act ethically All employees (including managers) must be trained to consider the ethical implications of all business decisions An ethics office must be set up in order for employees to share concerns anonymously Involve outsiders The ethics code must be enforced What is corporate social Corporate social responsibility: responsibility, and how the concern businesses have does it relate to each of a for the welfare of society business’s major Some believe that businesses stakeholders? owe their existence to the societies they serve, ethical companies tend to attract and retain better employees, and draw more customers What is a social audit? Social audit: a systematic What kinds of activities evaluation of an organization’s does it monitor? progress toward implementing socially responsible and responsive programs Monitors workplace issues, the environment, international operations and human rights, and respect for the local communities in which a business resides How are US businesses Some companies refuse to demanding socially work with or utilize the labor of responsible behavior from places where the employees their international aren’t treated well, or will suppliers? cancel order from suppliers 4 that violate ethical, environmental, and human rights codes Why is it unlikely that there Many cultures see different will be a single set or behaviors as being ethical or international rules unethical; standards have been governing multinational created but are not followed by companies soon? everyone CHAPTER 5 Most people who start Advantages: Ease of starting businesses in the US are and ending the business; Being sole proprietors. What are your own boss; Pride of the advantages and ownership; Leaving a legacy; disadvantages of sole Retention of company profit; proprietorship? No special taxes Disadvantages: Unlimited liability; Limited financial resources; Management difficulties; Overwhelming time commitment; Few fringe benefits; Limited growth; Limited life span Why would unlimited Because any debts or damages liability be considered a incurred by the business are major drawback to sole your debts, even if it means proprietorship? selling your home, your car, or anything else What’s the difference Limited partner: an owner between a limited partner invests money in the business and a general partner? but has limited liability General partner: an owner who has unlimited liability and is active in managing the firm What are some of the Advantages: More financial advantages and resources, Shared disadvantages of a management/complementary 5 partnership? skills and knowledge, Longer survival, No special taxes Disadvantages: Unlimited liability, Division of profits, Disagreements among partners, Difficult to terminate What are the major Advantages: Limited liability, advantages and Ability to raise more money for disadvantages of investment, Size, Perpetual life, incorporating a business? Ease of ownership change, Ease of attracting talented employees, Separation of ownership from management Disadvantages: Initial cost, Extensive paperwork, Double taxation, Two tax returns, Size, Difficulty of termination, Possible conflict with stockholders and board of directors What’s the role of owners Stockholders are not liable for (stockholders) in the the debts or other problems of corporate hierarchy? the corporation, though they are part owners in the company If you buy stock in a You can’t be sued because corporation and someone stockholders don’t have to gets injured by one of the worry about being liable for the products of that acts of the company corporation, can you be sued? Why or why not? Why are so many new LLC’s have the advantages of businesses choosing a limited liability (so their limited liability company personal assets are protected), (LLC) form of ownership? they can choose to be taxed as partnerships or corporations, they have flexible ownership rules, flexible distribution of 6 profits and losses, and the flexibility to operate how they please What are some of the It is important to remember factors to consider before that franchises have large buying a franchise? start-up costs, must share profits with the company, have many regulations when it comes to the way you manage the franchise, may have coattail effects, restrictions on selling, and there may be fraudulent franchisors What opportunities are Franchises have many available for starting a opportunities for minorities, corporate franchise? operating from home, operating online, or being global What is a cooperative? Cooperatives: businesses owned and controlled by the people who use them (producers, consumers, or workers) with similar needs who pool their resources for mutual gain CHAPTER 6 Why are people willing to People feel they have the take the risks of opportunity to share in the entrepreneurship? American dream, they will have a higher profit, they are more independent, and are excited by the challenge What are the advantages of Combine creative skills, can entrepreneurial teams? ensure more cooperation and coordination 7 differ from other company that will remain entrepreneurs? small, rather than trying to grow into a large corporation What does the government Immigration Act in 1990 – do to promote encourage entrepreneurs to entrepreneurship? come to the US Enterprise zones – lower taxes and other government support in certain geographic areas to attract private business investment Could offer tax breaks to businesses that make investments to create jobs A business plan is probably Executive Summary – describe the most important the business, and discuss document a small-business major goals and objectives owner will ever create. Company Background – There are nine sections in describe company operations, the business plan outline potential legal considerations, shown in the chapter. Can and areas of risk and you describe at least five of opportunity those sections? Management Team – organization chart, job descriptions of listed positions, and resumes of current and proposed executives Marketing Plan – Review industry size, rends, and the target market segment; discuss strengths and weaknesses of the product or service Manufacturing Plan – describe plant size, machinery required, production capacity, inventory, quality control, plant personnel requirements, etc. 8 Why do many small Financing is often difficult to businesses avoid doing find for global work, would-be business globally? exporters don’t know how to get started and do not understand cultural differences between markets, and the bureaucratic paperwork can threaten to bury small businesses What are some of the Overseas buyers like to deal advantages small with individuals rather than businesses have over large corporations, small businesses businesses in selling in can usually begin shipping global markets? much faster, they can provide a wide variety of suppliers, and they can give better customer service and undivided attention 9
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