Prince Sultan University – FALL 2009 - BUS 101 MAJOR I – Thursday, November 12,
2009
Student name …………………………………….. number …………………………… section
………….
Important note:
This exam includes 64 multiple chooses and three essay questions. Use the separate answer
for the questions from 1 to 64, do not write on the multiple choose questions, and use the
back of the questions sheet to answer the three essay questions. Make sure that you have 7
pages including this page.
The exam
Choose the best answer from the following, 0.25 point for each question.
1.A partner who invests money in a business, but does not take an active role in management
or assume unlimited liability for the firm's losses is known as a(n):
A) implied partner.
B) limited partner.
C) partial partner.
D) corporate partner.
2.An owner of a corporation is known as a(n):
A) general partner.
B) limited partner.
C) director.
D) stockholder.
3.The form of business ownership that is best suited to raising large amounts of money for
expansion is the:
A) sole proprietorship.
B) partnership.
C) corporation.
D) cooperative.
4.Which of the following is an advantage of a partnership?
A) ease of starting and ending the business
B) retention of company profit
C) longer survival
D) little time commitment
5.A___________ looks and acts much like a corporation and is traded on stock exchanges,
but is taxed like a partnership.
A) limited partnership
B) combined general partnership
C) cooperative partnership
D) master limited partnership
6.An entrepreneur who wishes to start a business with little delay or hassle, and who wants to
be his or her own boss, should organize the business as a:
A) sole proprietorship.
B) cooperative.
C) C corporation.
D) general partnership.
7. Which of the following is an advantage of offshore outsourcing?
A) Companies can create efficiencies that in fact let them hire more workers.
B) Wages increase in the home country.
C) Product quality improves and increases a company’s prices.
D) Communication between the company and its customers improves.
8. The European Union created a single monetary unit to replace the national currencies of
twelve member nations. This common currency is known as the:
A) e-dollar.
B) pound.
C) mercosur.
D) euro.
9. The purpose of the General Agreement on Tariffs and Trade (GATT) is to:
A) facilitate global trade.
B) create common market arrangements in specific geographical regions.
C) negotiate an end to civil wars.
D) establish a set of international property right laws.
10. ______________ is the economic theory advocating that a nation should try to sell more
goods to other nations than it buys from them.
A) Capitalism
B) Comparative advantage
C) Mercantilism
D) Inflation
ESSAY: answer only three questions out of the four questions below.
2 points each
1. Explain the difference between fiscal policy and monetary policy?
2. When faced with ethical dilemmas, what questions can you ask yourself that might
help you make ethical decisions?
3. What are the four basic rights that people have under free-market capitalism?
4. What are the free market limitations?