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1			The text defines a number of levels at which an organisation's environment can be defined. Which of the following is not a commonly used term to describe an element of the business environment?
			A)	Micro-environment.
			B)	Macro-environment.
			C)	Extrinsic environment.
			D)	Internal environment.
2			Which of the following does not form part of an organisation’s micro-environment?
			A)	Intermediaries
			B)	Customers
			C)	Statute legislation
			D)	Suppliers
3			Which of the following does not form part of a firm’s macro-environment?
			A)	internal environment
			B)	economic environment
			C)	technological environment
			D)	political environment
4			What term is used to describe the process which basic goods pass through as they are transformed into goods for final consumption?
			A)	circular flow of income
			B)	final delivery
			C)	logistics
			D)	value chain
5			Which of the following is the BEST example of the concept of the business cycle? :
			A)	The concept is the same as a value chain, but with the addition of a feedback loop
			B)	The process of internal business planning
			C)	The process of developing an external business plan
			D)	Prosperity in Europe during the decade to 2007, followed by the “credit crunch”
6			Viewed as a system, the essential purpose of all business organisations is to:
			A)	make the maximum level of profits
			B)	make a satisfactory level of profits
			C)	transform inputs to outputs
			D)	be a ‘good citizen’
7			What is a value chain?
			A)	It is a chain of discount retailers, e.g. Lidl
			B)	A top quality retail chain selling luxury goods at value prices
			C)	A system of manufacturers, wholesalers and retailers who add value to a product
			D)	An auditing tool for tracking value for money
8			Most western countries experienced a decade of prosperity, and then from 2008 a period of recession. A term that describes the transition between these two stages is often
			A)	the multiplier effect.
			B)	the business cycle.
			C)	inflation.
			D)	deflation.
9			Ethical behaviour needs to be considered by business organisations because
			A)	The customer knows best, and organisations must always do what the customer wants
			B)	Customers may not always appreciate the consequences of their actions
			C)	There is always a legal requirement to act ethically
			D)	Ethics is the same as law
10			An organisation and its ‘environmental set’ members constitutes a system. Because it is difficult to place a boundary round the environment and to identify the complete set of components within the system, such a system is often referred to as a:
			A)	Open system
			B)	Closed system
			C)	Ecological system
			D)	Micro-environment