|
| 1 | Adam Smith, who believes that capitalism is the best route to human happiness, viewed capitalism as |
 | A) | a system of free checks and balances. |
| B) | a new way of creating markets. |
| C) | an efficient use of resources and manpower. |
| D) | the wealth of nations. |
|
| 2 | Karl Marx and Friedrich Engels, who do not believe that capitalism is the best route to human happiness, predicted that a "free enterprise" system would lead to |
| A) | poverty for the masses. |
| B) | servitude of the workers. |
| C) | periodic crises of the economy. |
| D) | all of the above |
|
| 3 | According to Simon Johnson and James Kwak, the most obvious place to look for excessive risk is |
| A) | third-party contracts. |
| B) | leverage. |
| C) | foreign holdings. |
| D) | arbitrage. |
|
| 4 | During the Great Moderation, as Barry Eichengreen explains, the primary focus of monetary policy was on |
| A) | low inflation. |
| B) | moderate gold prices. |
| C) | stable trade balances. |
| D) | supporting a strong dollar. |
|
| 5 | What does Milton Friedman, who believes that increasing profits is the only social responsibility of business; observe when business leaders speak about social responsibility in a free-enterprise system? |
| A) | They are preaching pure and unadulterated socialism. |
| B) | Business is not following its directive. |
| C) | The acts of the corporation/business are ruled by law. |
| D) | The business spokesperson is not really responsible. |
|
| 6 | Friedman’s theory was recently challenged by a 2010 Supreme Court ruling in Citizens United v. FEC, which allows that, as persons, corporations can now: |
| A) | form lobbying groups. |
| B) | draft legislation. |
| C) | question election results. |
| D) | contribute to political candidates. |
|
| 7 | Corporate ethics has taken on a much more prominent position in the business world since the |
| A) | auto industry bailout. |
| B) | near-collapse of insurance giant AIG. |
| C) | collapse of the domestic housing market. |
| D) | failure of Enron Corporation. |
|
| 8 | The federal Sarbanes-Oxley Act includes a requirement that publically-traded companies disclose |
| A) | whether they have a formal code of ethics in place to determine wrongdoing. |
| B) | long-term corporate financial-planning strategies. |
| C) | any ethics complaints that have been brought against them by employees. |
| D) | all foreign and domestic subsidiary holdings. |
|
| 9 | Lloyd C. Blankfein, in his opening address, thanks the U.S. Senate for |
| A) | dismissing an ongoing SEC investigation into Goldman Sachs’ finances. |
| B) | refusing to address the matter of huge bonuses in the financial sector. |
| C) | lending Goldman Sachs funds during the financial crisis. |
| D) | allowing Goldman Sachs to oversee the dispersal of some of the stimulus funds. |
|
| 10 | Leading up to the financial crisis, John C. Bogle maintains, the marketplace created a society in which |
| A) | success is measured in monetary terms. |
| B) | fraud was no longer morally repugnant. |
| C) | it was expected that the federal government could always bail out failures. |
| D) | making money became an end in itself. |
|
| 11 | The U.S. market may have needed a federal bailout earlier than the one it received through the troubled asset relief program (TARP) in 2008, in order to prevent |
| A) | widespread unemployment. |
| B) | a global devaluation of U.S. currency. |
| C) | wild speculation in the bond market. |
| D) | steadily rising inflation. |
|
| 12 | One fallout of the Great Recession was that government economists found |
| A) | they lacked the skills to devise strategies for halting the crisis. |
| B) | they lacked the skills to devise strategies for halting the
crisis. |
| C) | their reputations severely damaged. |
| D) | they were more in demand than ever, as they worked to devise explanations and solutions. |
|
| 13 | In arguing in favor of derivatives, Yong Chen focuses on their use by: |
| A) | individual investors. |
| B) | mutual funds. |
| C) | retail brokers. |
| D) | hedge funds. |
|
| 14 | Thomas A. Bass, who does not believe that the risks of derivatives are manageable, describes how easily the black market can play into the derivatives market when he identifies derivatives as a kind of: |
| A) | zombie institution. |
| B) | financial speakeasy. |
| C) | toxic waste. |
| D) | shadow banking system. |
|
| 15 | Robert Larson, who believes that the Federal Reserve should be abolished, claims that the Federal Reserve deserves its reputation as a “captured” regulator, meaning that it is: |
| A) | so bogged down in regulations that it can no longer operate effectively. |
| B) | predominantly run by former Wall Street bankers. |
| C) | hugely in debt to foreign investors. |
| D) | largely under the influence of the Republican Party. |
|
| 16 | Daniel Indiviglio, who does not believe the Federal Reserve should be abolished, states that the Fed’s two most important duties are supervision and: |
| A) | conducting the nation’s monetary policy. |
| B) | maintaining the stability of the financial system. |
| C) | providing financial services to depository institutions. |
| D) | operating the nation’s payments system. |
|
| 17 | The Federal Trade Commission (FTC) has argued that the patent protecting tactic known as “pay-for-delay” violates: |
| A) | interstate commerce regulations. |
| B) | antitrust laws. |
| C) | professional ethical standards. |
| D) | international trade agreements. |
|
| 18 | In general, federal courts have concurred with the drug industry’s position that pay-for-delay agreements between brand name and generic companies: |
| A) | cause no harm to consumers. |
| B) | are only temporary arrangements. |
| C) | are consistent with free-trade practices. |
| D) | constitute standard legal settlements. |
|
| 19 | According to Sissela Bok, who believes that blowing the whistle violates company loyalty, "whistle-blowing" is a new label generated by the |
| A) | dangers in the workplace. |
| B) | need to keep employers on their toes. |
| C) | public’s increased awareness of the ethical conflicts encountered in the workplace. |
| D) | news media's willingness to pay for stories. |
|
| 20 | Robert A. Larmer, who does not believe that blowing the whistle violates company loyalty, refutes Ronald Duska's view that employees do not have even a prima facie duty of loyalty to their employers. Which one of the following defenses does Larmer not employ? |
| A) | Loyalty that is not entirely reciprocated is not necessarily misplaced. |
| B) | It is not impossible for an employee to know what's in the company's best interests. |
| C) | A company may be thought of as a moral agent. |
| D) | Although the primary motive for working is economic, questions of loyalty are not irrelevant. |
|
| 21 | Although social networking is now the focus of employee-privacy ethics, the previous generation’s privacy ethics focused on: |
| A) | telephone messages. |
| B) | personal mail. |
| C) | moonlighting jobs. |
| D) | e-mail. |
|
| 22 | A company’s interests can be impacted by social-media sites used by employees as disgruntled employees have been known to use their personal sites to: |
| A) | share potentially damaging company or client information. |
| B) | threaten other employees. |
| C) | advertise their ongoing job search. |
| D) | spread false information about business competitors. |
|
| 23 | Chief executive salaries have risen enormously over the past two decades in large part because shareholders |
| A) | have not been paying sufficient attention. |
| B) | grant decision-making power to the boards of directors, who are often CEOs of other companies. |
| C) | believe few people have the drive and ambition to reach the CEO level. |
| D) | wish to reward company leaders for the increase in the stock price. |
|
| 24 | Possibly the worst effect of rapidly rising compensation for executives is that it |
| A) | diminishes shareholder returns. |
| B) | creates envy in other CEOs, leading to further increases. |
| C) | comes at the expense of fair compensation for workers. |
| D) | leads to a faster effort to fire a CEO when stock prices falter. |
|
| 25 | One of the latest sectors to be changed significantly by the use of robots has been the: |
| A) | pharmaceutical industry. |
| B) | financial services sector. |
| C) | medical field. |
| D) | defense industry. |
|
| 26 | The next sector of the economy likely to be impacted by the use of robot workers is predicted to be the: |
| A) | medical field. |
| B) | realm of education. |
| C) | service sector. |
| D) | civil-service sector. |
|
| 27 | As Stephanie Clifford explains, the Council of Better Business Bureaus saw problems in a recent advertisement for Tulip Glam-It-Up iron-on crystals in that the placement in Discovery Girls magazine was |
| A) | not clearly marked as an advertisement. |
| B) | sexually suggestive. |
| C) | unrelated to the general content of the magazine. |
| D) | deceptive in describing the quantity of projects that could be completed from a single kit. |
|
| 28 | A recent city government decision, as reported by Patrick Basham and John Luik, would ban toys in fast-food meals in |
| A) | Miami. |
| B) | New York. |
| C) | San Francisco. |
| D) | Austin. |
|
| 29 | The original purpose of labeling on food and other products was to: |
| A) | explain how to use the product. |
| B) | warn consumers of any possible dangers arising from use of the product. |
| C) | sell the product. |
| D) | provide the manufacturer’s name and address. |
|
| 30 | Many supporters of labeling for GM products are hoping that if these products are clearly identified as containing GM components, the public will: |
| A) | be worried these products are not safe. |
| B) | begin to investigate other deceptive practices in food marketing. |
| C) | stop consuming processed foods. |
| D) | adopt a vegetarian diet. |
|
| 31 | The founders of the United States could not have imagined the current controversy over genetic patents when they were considering the still relevant right to: |
| A) | privacy. |
| B) | publicity. |
| C) | property. |
| D) | speech. |
|
| 32 | The law of intellectual property rests on the assumption that: |
| A) | most ideas are likely to be stolen as soon as they are described. |
| B) | there are very few people capable of devising unique ideas. |
| C) | science can progress more rapidly if there is a free exchange of ideas. |
| D) | all intellectual property is inherently valuable. |
|
| 33 | Some of the potential harms of hydraulic fracturing include all of the following except: |
| A) | loss of water. |
| B) | contamination of water sources. |
| C) | genetic mutations in plants. |
| D) | increased danger of earthquakes. |
|
| 34 | One country where hydraulic fracturing has been banned entirely is: |
| A) | France. |
| B) | Canada. |
| C) | Australia. |
| D) | Nigeria. |
|
| 35 | The curve for when oil supplies are expected to run out has lengthened in recent years in large part because |
| A) | the world is consuming less oil. |
| B) | new reserves have been discovered. |
| C) | oil recovery technology has progressed. |
| D) | statistical analysis has become better. |
|
| 36 | Oil reserve growth, as explained by Red Cavaney, is the result of all of the following factors except |
| A) | technological advancement in exploration and production. |
| B) | increases over initially conservative estimates of reserves. |
| C) | economic changes. |
| D) | closer relationships with oil-producing countries. |
|
| 37 | Jeffrey Miron, who believes that the 2012 Wal-Mart case shows the Foreign Corrupt Practices Act is obsolete, nevertheless says that Wal-Mart should: |
| A) | not be prosecuted. |
| B) | be prosecuted. |
| C) | pay the bribes and continue to do business in Mexico. |
| D) | deny guilt and fight prosecution. |
|
| 38 | Charlie Savage, who does not believe that the 2012 Wal-Mart case shows the Foreign Corrupt Practices Act to be obsolete, reports that the FCPA is enforced by divisions of all of the following except the: |
| A) | FBI. |
| B) | Justice Department. |
| C) | Securities and Exchange Commission. |
| D) | Attorney General’s office. |