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| 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. |
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| 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 |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 7 | |
Robert C. Solomon, who believes that individual virtue can survive corporate pressure, argues that whatever the structures, a person of virtue |
| | A) | has an opportunity to make limited decisions. |
| | B) | can create the type of business atmosphere that they want work in. |
| | C) | has free choices and can create a good moral tone. |
| | D) | has far too much importance in the company. |
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| 8 | |
Gilbert Harman, who does not believe that individual virtue can survive corporate pressure, |
| | A) | argues for individual influences in business. |
| | B) | presents facts for change in a corporate environment. |
| | C) | outlines the moral obligations of employees. |
| | D) | is a powerful determinist that concludes no individual can make a difference in a group enterprise. |
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| 9 | |
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. |
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| 10 | |
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 deter 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. |
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| 11 | |
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. |
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| 12 | |
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. |
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| 13 | |
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. |
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| 14 | |
One fallout of the Great Recession was that government economists found |
| | A) | they lacked the skills to devise strategies for halting the crisis. |
| | B) | a great deal of support from their colleagues in the private and academic spheres. |
| | C) | their reputations severely damaged. |
| | D) | they were more in demand than ever, as they worked to devise explanations and solutions. |
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| 15 | |
Justin Welby, who believes that the risks of derivatives are manageable, points out that, although they are not a controlling group, the most powerful group in a commodity typically are the |
| | A) | intermediaries. |
| | B) | "silent" overseers. |
| | C) | producers. |
| | D) | consumers. |
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| 16 | |
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. |
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| 17 | |
Jeremy Snyder, who believes that price gouging should be regulated, has observed that anti-gouging legislation is typically triggered by |
| | A) | the declaration of a state of emergency or disaster. |
| | B) | a shift in leadership. |
| | C) | political posturing. |
| | D) | corporate scandals. |
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| 18 | |
Matt Zwolinski, who does not believe that price gouging should be regulated, says that what undermines equitable access to goods is |
| | A) | the emergency. |
| | B) | lack of initiative. |
| | C) | regulated price gouging. |
| | D) | greed. |
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| 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. |
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| 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. |
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| 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. |
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| 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. |
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| 23 | |
According to Epstein, the most efficient use of labor in the marketplace requires |
| | A) | Firm commitments to long contracts |
| | B) | Covenants that entail lifelong relationships |
| | C) | Flexibility to terminate contracts at will |
| | D) | No agreement at all between employer and employee |
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| 24 | |
Epstein's defense of Employment At Will rests on |
| | A) | The Natural Law |
| | B) | General consensus that contracts should be easy to terminate |
| | C) | The financial power wielded by wealthy employers |
| | D) | The Common Law presumption of freedom |
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| 25 | |
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. |
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| 26 | |
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. |
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| 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. |
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| 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. |
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| 29 | |
Apart from the obligation to pay a mortgage owed to the lender, the borrower may be expected to also have an obligation to pay |
| | A) | for his or her own peace of mind. |
| | B) | for the stability of the community. |
| | C) | to maintain credibility in the workplace. |
| | D) | to avoid legal difficulties. |
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| 30 | |
In centuries past, contracts emerged as a source of economic obligation to replace |
| | A) | verbal agreements. |
| | B) | full, up-front payments. |
| | C) | inherited duties. |
| | D) | agreements witnessed by the community. |
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| 31 | |
Philip L. Bereano, who believes that we should require labeling for genetically modified food, argues that the demand for a label for genetically engineered food products is legitimate based upon |
| | A) | the First Amendment right of free speech. |
| | B) | our interest in knowing the process by which food is produced. |
| | C) | the patent office rules. |
| | D) | previous experiences. |
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| 32 | |
With regard to the law governing labeling of foods, John A. Levitt, who does not believe that we should require labeling for genetically modified food, contends that labels must |
| | A) | include where items are produced, how they are produced, and by whom. |
| | B) | contain all the product's contents, be age specific, and note allergic reaction possibilities and shelf life. |
| | C) | state possible health risks, or where there is danger that a product's marketing claims may mislead the consumer as to the food's characteristics. |
| | D) | reveal the breeding techniques used in producing the food. |
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| 33 | |
Manuel Velasquez argues that multinational corporations are free from moral obligation only if the interactions are |
| | A) | nonrepetitive, and agent reliability is not possible. |
| | B) | done by U.S. multinational corporations. |
| | C) | overseen by the United Nations. |
| | D) | done by foreign corporations, not the United States. |
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| 34 | |
John E. Fleming, who does not believe that multinational corporations are free from moral obligation, believes that the very nature of the corporation managers in a competitive environment fosters |
| | A) | mean-spirited decisions in foreign communities. |
| | B) | corporate social responsibility and concern for the environment. |
| | C) | poor communications with local governments. |
| | D) | illegal price fixing and controls. |
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| 35 | |
Denis G. Arnold and Norman E. Bowie, who believe that sweatshops are an inhumane business practice, interpret the writings of Kant when they say that indifference is |
| | A) | more a matter of outward perception than inward reality. |
| | B) | one thing to one person and quite another to the next person. |
| | C) | a denial of respect. |
| | D) | a primal instinct. |
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| 36 | |
Gordon G. Sollars and Fred Englander, who do not believe that sweatshops are an inhumane business practice, contest Arnold and Bowie's claim that multinational enterprises (MNEs) have a duty to |
| | A) | pay a subsistence wage above market levels. |
| | B) | their shareholders. |
| | C) | one another. |
| | D) | preserve a positive popular opinion. |
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| 37 | |
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. |
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| 38 | |
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. |
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| 39 | |
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. |
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| 40 | |
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. |
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