business management chapter 4

CHAPTER 4CREATING AND MANAGING SERVICE OUTLETS:NEW CHARTERS, BRANCHES, AND ELECTRONIC FACILITIESGoal of This Chapter: The purpose of this chapter is to learn how new banks are chartered by state and federal authorities in the United States, to determine what makes a good site for a new branch office, to recognize how the role of branch offices is changing, and to explore the advantages and disadvantages of automated banking facilities.Key Topics in This Chapter•Chartering New Financial Service Institutions•Performance of New Banks•Establishing Full Service Branches•In-Store Branching•Establishing Limited Service Facilities•ATMs and Telephone Centers•The Internet and Online BankingChapter OutlineI. IntroductionA. The Importance of Convenience and Timely Access to CustomersB. Service Options Available Today1. Chartering New (De Novo) Financial Institutions2. Establishing New Full-Service Branches3. Setting Up Limited-Service FacilitiesII.Chartering a New Bank or Other Financial Service InstitutionsIII.The Bank Chartering Process in the United StatesA. The Chartering Authorities in the U.S.B. Benefits of Applying for a National CharterC. Benefits of Applying for a State CharterIV. Questions Regulators Usually Ask the Organizers of a New BankV. Factors Weighing on the Decision to Seek a New Bank CharterA. External Factors1. Level of Economic Activity2. Growth of Local Economic Activity3. The Need for a New Bank4. Strength and Character of Local Competition in Supplying FinancialServicesB. Internal Factors1. Qualifications and Contacts of the Organizers2. Management Quality3. Pledging of Capital and Funds to Cover the Cost of Filing a CharterApplication and Getting UnderwayVI. Volume and Characteristics of New Bank ChartersA. Numbers of New ChartersB. Characteristics of New Charter MarketsVII. How Well Do New Banks Perform?A. New Bank Financial PerformanceB. Pro-Competitive Effects on Service Offerings and Service PricingVIII. Establishing Full-Service Branch Offices: Choosing Locations and Designing New BranchesA. Advantages of Full-Service BranchesB. Trends in the Design of New BranchesC. Desirable Sites for New BranchesD. Expected Rate of ReturnE. Geographic DiversificationF. Branch RegulationG. The Changing Role of BranchesH. In-Store BranchingIX. Establishing and Monitoring Automated Limited-Service FacilitiesX. Point-of-Sale TerminalsXI. Automated Tellers (ATMs)A. History of ATMsB. ATM ServicesC. Fee Structures for ATM UsageD. Customer Service Limitations of ATMsE. Example of the ATM Capital-Budgeting DecisionXII. Home and Office Online BankingA. Telephone Banking and Call CentersB. Internet Banking1. Services Provided Through the Internet2. Challenges in Providing Internet Services3. The Net and Customer Privacy and SecurityXIII. Financial Service Facilities of the FutureXIV. Summary of the ChapterConcept Checks4-1. Why is the physical presence of a bank still important to many bank customers despite recent advances in long-distance communications technology?Many customers still prefer the personal attention and personal service that contact with bank employees provides. Moreover, for those services where problems can arise that require detailed information and explanation-for example, when a checking account is overdrawn and checks begin to bounce-the customer needs quick access and, often, the personal attention to his or her problem on the part of one or more employees.4-2. Why is the creation (chartering) of new banks closely regulated? What about nonblank financial firms?The creation of new banks is regulated to insure the safety and soundness of existing banks and to avoid excessive numbers of bank failures. The same arguments are usually made for non-bank financial firms. Financial-Service firms hold the public’s savings, are the heart of the payment system and create money. The failure of these firms could disrupt the economy and too many could mean in excessive growth in the money supply and inflation.4-3. What do you see as the principal benefits and costs of government regulation of the number of financial service charters issued?While control over the entry of new banks may reduce the number of failures, it also limits competition, so that the public may receive a smaller volume or lower quality of services at excessive prices.4-4. Who charters new banks in the United States? New thrift institutions?New banks are chartered by the banking commissions of the individual states or, at the federal level, by the Comptroller of the Currency. Thrift institutions are chartered by the states or at the federal level by the Office of Thrift Supervision.4-5. What key role does the FDIC play in the chartering process?The FDIC exercises some control over state bank charter activity as well as federal charters because most states insist that their new banks qualify for federal deposit insurance before they can open for business.4-6. What are the advantages of having a national bank charter? A state bank charter?The benefits of a national charter are:a.)It brings prestige due to stricter regulations and may help attract more customersb.)In times of trouble the technical assistance given may be better ensuring a betterchance of long run survivalThe benefits of a state charter are:a.)It may be easier and less costly to get a state charterb.)The bank does not have to join the Federal Reserve and therefore avoids buying andholding low yield stock of the Federal Reservec.)Many states let a bank lend more to one borrowerd.)State chartered banks may be able to make types of loans that a nationally charteredbank cannot4-7. What kinds of information must the organizers of new national banks provide the Comptroller of the Currency in order to get a charter? Why might this required information be important?The Comptroller of the Currency asks for information on the number of competing banks and bank-like institutions in the service area of the proposed bank. More competitive market situations limit the profit potential and perhaps the growth potential of a new bank. Also requested is information about shopping centers, retail and wholesale business activity, recent population growth, traffic counts, and personal income levels - all viewed as indicators of potential demand for banking services in the service area of the proposed new bank. Applicants must also provide background information on the organizers and proposed management of a new bank so the Comptroller can decide if these people are qualified, law-abiding, and trustworthy to manage the public's funds as well as their own.4-8. Why do you think the organizers of a new financial firm are usually expected to put together and submit to the chartering authority a detailed business plan, including marketing, management, and financial components?This demonstrates to regulators that the organizers of the bank have the expertise, experience and skills necessary to be successful in managing the new bank. If the organizers of a bank do not know where they are going, they are unlikely to be successful. In addition, it demonstrates whether the organizers of the new bank have a realistic picture of the community they are planning on serving and whether the organizers have a realistic view of the profit potential in the new bank. 4-9. What are the key factors the organizers of a new financial firm should consider before deciding to seek a charter?While a variety of factors are examined by different business people interested in establishing a new bank, most look at some or all of the following factors.1. External Factorsa. The level of local economic activity.b. Growth of local economic activity.c. The need for a new bank.d. The strength and character of local competition in supplying financialservices.2. Internal Factorsa. Qualifications and contacts of the new bank's organizers.b. Management quality.c. Pledging of capital and funds to cover the cost of filing a charter applicationand begin operations.4-10. Where are most new banks chartered in the United States?New charters tend to be concentrated in large urban areas where expected rates of return on the organizers investments are likely to be the highest. As the population increases relative to the number of financial firms, the number of new charters increases. The success of local banksalready in the area suggests that new financial firms would also be successful. Places where the concentration ratio for new banks has increased tend to have fewer new bank charters.4-11. How well do most new banks perform for the public and for their owners?Most new banks succeed, especially those whose organizers can bring in new deposits and loan accounts during the first year of the bank's operation. Most are profitable within two to three years of opening. There is some ev idence that newly charted banks are financially ‘fragile’ and more prone to failure than existing banks. They appear to be more vulnerable to real estate crises than established banks. New banks tend to under perform their competitors until they have been around for a while and new banks are more closely supervised than established banks.4-12. Why is the establishment of new branch offices usually favored over the chartering of new financial firms as a vehicle for delivering financial services?The chartering of a new financing corporation is normally a lengthy and expensive process, requiring the completion of elaborate federal or state application forms, while the branch application process is normally far simpler and less costly. Moreover, with the increase in the number of failures in recent years regulatory-imposed capital requirements for new charters have increased substantially, while new branch offices usually carry significantly lower capital requirements. Moreover, branch offices themselves are often much less elaborate and costly to build and maintain than are the headquarters' facility of a new institution where some duplicate facilities can be eliminated (for example, checking processing, credit analysis, and records departments).4-13. What factors are often considered in evaluating possible sites for new branch offices? Bankers first need to decide the goals and objectives of a new facility. Often this means assessing whether the proposed new branch is aimed at selling one or more particular services, such as deposits or loans, and also deciding how closely correlated cash flows and returns from the new branch office may be with cash flows and returns from the other facilities operated by the bank. If returns or cash flows through the proposed new institution are negatively correlated or display low positive correlation with the institution's other facilities, they may be able to lower the variance of its returns or cash flows by proceeding to establish the new office.Other considerations revolve around the economic strength of the proposed branch officesite-whether there is adequate traffic volume, large numbers of stores and shops, older or younger age populations who often require slightly different menus of services, recent area population growth, density and income, the occupational and residential makeup of the proposed new branch area, a large enough population to generate enough customers to breakeven and the number and size of facilities operated by competitors. Generally, for branches designed to attract and hold deposits key factors to consider usually revolve around individual and family incomes, concentrations of retail stores and shops, older-than-average residents, and homeowners rather than renters. For branch facilities emphasizing credit services residential areas with substantial new construction activity, heavy traffic flow, and high concentrations of stores and shopping centers are typically desirable for consumer and retail loan demand, while central city office locations are often chosen as locations for commercial loan facilities.4-14. What changes are occurring in the design of, and the roles played by, branch offices? Please explain why these changes are occurring.Bank branches are increasingly becoming selling platforms in which more and more fee-based services are attractively and prominently advertised in order to maximize the fee-income generating potential of each branch. Moreover, branches are becoming increasingly automated to reduce personnel and other operating costs and improve speed, efficiency, and accuracy in handling a growing service volume. Branch design has come to reflect these trends with automated facilities placed at easy access points, along with information booths to speedily direct customers to the service areas they need. Human tellers may be placed deeper inside branch facilities so that customers must pass by other service departments and conspicuous advertising in order to encourage customers to become aware of and avail themselves of other bank services.4-15. What laws and regulations affect the creation of new bank and thrift branches and the closing of existing branches? What advantages and what problems can the closing of a branch office create?The opening of new branch off ices must be approved by a bank's or thrift’s principal federal or state supervisor. Closing a branch office has become much more complicated in recent years as the result of several new laws and regulations. For example, the FDIC Improvement Act requires 90 days advance notice of branch closings to both customers and the principal supervisory agency and a posting on the branch site at least 30 days prior to closing. Banks and thrifts must also make an "affirmative effort" to reach all segments of their communities without discrimination under the terms of the Community Reinvestment Act which raises the danger of customer protests against closings if it appears the bank is under-serving certain groups of customers. Finally, the Community Reinvestment Act can be used as a vehicle to prevent U.S. banks and thrifts from branching expansion when they have a poor record of serving all segments of their communities. Closing selected branch offices can reduce operating costs and divert resources from less profitable to more profitable uses. However, they risk alienating good customer relationships unless it can serve those same customers with its remaining facilities.4-16. What new and innovative sites have been selected for new branch offices in recent years? Why have these sites been chosen by financial firms? Do you have any ideas about other sites that you believe should be considered?Rapid increases in new branches located in grocery stores, shopping centers, and inside other businesses and facilities where the public frequently gathers have helped to reduce branch construction costs and promote cross-selling of goods and financial services. Other branches have been opened in apartment complexes, senior citizen centers, and other customer-convenient locations as bankers come to realize they must adjust their service locations and service hours to conform to customer needs in an intensely competitive financial-services environment.4-17. What are POS terminals and where are they usually located?Point-of-sale terminals are set up to accommodate customer purchases of goods and services. These computer terminals normally are located in retail stores, gasoline stations, and similar places with a link to the banks’ own computer records. When a customer of the bank makes a purchase, the amount of the transaction is deducted from the customer's deposit account and added to the store's account. Because the customer immediately loses funds many bank customers have been hesitant to use the service as opposed to paying by check or credit card where payment is delayed for a few days. However, this depends on whether the POS terminal is an offline or online terminal. An offline terminal accumulates all transactions until the end of the day when all transactions are su btracted from a customer’s account. This type of terminal is less costly for the bank to operate. An online terminal subtracts the transactions immediately from the customer’s account and reduces the chance of an overdraft occurring but is more expensive for the bank to operate. Consumer reluctance to use POS terminals appears to be fading and as fees for other services rise this reluctance will continue to disappear.4-18. What services do ATMs provide? What are the principal limitations of ATMs as a service provider? Should ATM carry fees? Why?The earliest ATMs provided a convenient mechanism for cashing checks, making deposits, and verifying checking account balances, often at hours when the full-service branch offices were closed. Today, ATMs frequently provide a wide menu of old and new services, including bill paying, transfer of funds between accounts, and the purchase of tickets for travel and entertainment. Most authorities expect ATM usage to grow rapidly as these machines offer more services and as bankers increasingly move to restrict customer access to more costly human tellers and other bank personnel, often by charging extra fees for personal service.ATMs do have some significant limitations that bankers will have to work to overcome. They break down and need to be replaced, sometimes quite frequently and annoyingly for customers, and as technology changes often become quickly outdated. Customer activity around ATMs, particularly at night, has invited criminals to steal money and injure customers, sometimes creating liability for banks. Moreover, not all customers make use of these facilities due to a preference for personalized service, fear of crime, or unfamiliarity with how the machines work. Customer education and better service pricing are two important tools that could help with these problem areas in the future. In addition, ATMs do not rank high in their ability to sell peripheral services. Some banks have found that there has been a sharp decline in their ability to sell other services. Finally, ATMs are not necessarily profitable for all banks. Because they are available 24 hours, some customers may make more frequent and smaller withdrawals from the machine than they would with a human teller, driving up the costs. In addition, these same customers will often still demand a human teller to deposit their pay check, making the bank keep both tellers and ATM machines.Whether ATM should carry a fee is rather controversial. Recently, two of the largest ATM networks have decided to let owners of ATMs charge non-customers a surcharge. Several regional have begun to charge fees as well. These fees reflect the usage of ATMs. About 85% of all ATM transactions consist of cash withdrawals and only about 10 percent represent incoming deposits. In addition, in many places, ATM usage has declined as customers pass over ATMs in favor of credit and debit cards, onsite terminals and the internet.4-19. What are self-service terminals and what advantages do they have for financial institutions and their customers?Self-service terminals include ATMs and other computer-based limited-service facilities that permit a customer to call up information about his or her account and recent transactions with the institution or information about different services that the customer might be interested in purchasing. Many are accessible 24 hours a day or are easier to get to rather than wait for the help of personnel. They can save on resources by saving on staff time. Many institutions are adding telephones and video screens so that customers with problems can dial up an employee day or night with problems. This is also saving money because they can avoid duplication of staff at each branch.4-20. What financial services are currently available from banks on the internet? What problems have been encountered in trying to offer internet services?Customers can make payments, check on account balances, move funds between accounts and get applications for loans, deposits and other services. In addition banks can advertise on the web. Some of the problems include protecting customers’ privacy and heading off crime. In addition, the web does not make it easy for a bank to get to know their customers personally. The cost may also be prohibitive to some customers.4-21. How can financial firms better promote internet services?They need to emphasize the safety of their internet services. They need to promote their home page at every opportunity and update it frequently to keep customers’ interest. They need to survey customers about their satisfaction with the services and encourage dialogue via e-mail to resolve problems. They can also provide programs to download to act as screen savers (and advertisements) and also information about the institution and the services it provides. Problems4-1. A group of businessmen and women from the town of Mathews are considering filing an application with the state banking commission to charter a new bank. Due to a lack of current banking facilities within a 10-mile radius of the community, the organizing group estimates that the initial banking facility would cost about $3.2 million to build along with another $700,000 in other organizing expenses and would last for about 20 years. Total revenues are projected to be $510,000 the first year, while total operating expenses are projected to reach $180,000 in year 1. Revenues are expected to increase 6 percent annually after the first year, while expenses will grow an estimated 5 percent annually after year 1. If the organizers require a minimum of a 10 percent annual rate of return on their investment of capital in the proposed new bank, are they likely to proceed with their charter application given the above estimates?Year Revenues Op Expense Net Profits1 $510,000 $180,000 $330,0002 $540,600 $189,000 $351,6003 $573,036 $198,450 $374,5864 $607,418 $208,373 $399,0465 $643,863 $218,791 $425,0726 $682,495 $229,731 $452,7647 $723,445 $241,217 $482,2288 $766,851 $253,278 $513,5739 $812,863 $265,942 $546,92110 $861,634 $279,239 $582,39511 $913,332 $293,201 $620,13112 $968,132 $307,861 $660,27113 $1,026,220 $323,254 $702,96614 $1,087,793 $339,417 $748,37715 $1,153,061 $356,388 $796,67316 $1,222,245 $374,207 $848,03817 $1,295,579 $392,917 $902,66218 $1,373,314 $412,563 $960,75119 $1,455,713 $433,191 $1,022,52220 $1,543,056 $454,851 $1,088,205Initial Investment $3,900,000Required Rate of Return 0.10Present Value of Future CashFlows $4,491,642Net Present Value of Investment $591,642Given the above information, the organizers are likely to proceed given that the net present value of this investment is positive. The return they are going to earn is greater than the 10% they need to earn.4-2. Andover Savings Bank is considering the establishment of a new branch office at the corner of Lafayette and Connecticut Avenues. The savings association’s Economics Department projects annual operating revenues of $1.75 million from services sold to generate fee income and annual branching operating expenses of $880,000. The cost of procuring the property is $2.5 million and branch construction will total an estimated $2.32 million; the facility is expected to last 16 years. If the savings bank has a minimum acceptable rate of return on its invested capital of 12 percent, will Andover likely proceed with this branch office project?Year Revenues Op Expenses Net Profits1 $1,750,000 $880,000 $870,0002 $1,750,000 $880,000 $870,0003 $1,750,000 $880,000 $870,0004 $1,750,000 $880,000 $870,0005 $1,750,000 $880,000 $870,0006 $1,750,000 $880,000 $870,0007 $1,750,000 $880,000 $870,0008 $1,750,000 $880,000 $870,0009 $1,750,000 $880,000 $870,00010 $1,750,000 $880,000 $870,00011 $1,750,000 $880,000 $870,00012 $1,750,000 $880,000 $870,00013 $1,750,000 $880,000 $870,00014 $1,750,000 $880,000 $870,00015 $1,750,000 $880,000 $870,00016 $1,750,000 $880,000 $870,000Initial Investment $4,820,000Required Rate of Return 0.12Present Value of Future CashFlows $6,067,368Net Present Value of Investment $1,247,368Andover is likely to proceed with this project because the net present value is positive. This means that the interest rate that Andover will earn on this project is higher than the 12% they need to earn. 4-3. Jackson Bank of Commerce estimates that building a new branch office in the newly developed Guidar residential township will yield an annual expected return of 13 percent with an estimated standard deviation of 5 percent. The bank’s marketing department estimates that cash flows from the proposed Guidar branch will be mildly correlated (with a correlation coefficient of +0.3) with the bank’s other sources of cash flow. The expected annual return from the bank's existing facilities and other assets is 10 percent with a standard deviation of 3 percent. The branch will represent just 10 percent of Jackson’s total assets. Will the proposed branch increase Sullivan's overall rate of return? Its overall risk?The estimated total rate of return would be:E (R) = 0.10 (13%) + 0.90 (10%) = 10.3%The risk attached to this overall return rate would be:Thus ?? 2.89% and the branch will slightly increase the bank's expected return but slightly decrease its overall risk. The bank should proceed with this project.4-4. The following statistics and estimates were compiled by First Savings Bank of Talbot regarding a proposed new branch office and the bank itself:Branch Office Expected Return 16%Standard Deviation of Return = 7%Ban k’s overall expected return= 10%Standard deviation of bank’s return= 3%Branch Asset Value as a Percentof Total Bank Assets = 15%Correlation of Cash Flows = + 0.27What will happen to the Talbot’s total expected return and overall risk if the proposed new branch is adopted?The bank's total expected return is:E (R) = 0.15 (16%) + 0.85 (10%) = 10.9%The bank's risk exposure is:σ=And thus .0301 or 3.01%The proposed project raises the savings banks expected return slightly and does not affect the risk of the bank. This is a good project.4-5. First National Bank of Yukon is considering installing 3 ATMs in its westside branch. The new machines are expected to cost $48,000 apiece. Installation costs will amount to about $16,000 per machine. Each machine has a projected useful life of 10 years. Due to rapid growth in the westside district these three machines are expected to handle 180,000 transactions per year. On average, each cash transaction is expected to save $0.32 per transaction in check processing costs. If First National has a 12% cost of capital, should the bank proceed with this investment project? Year Savings1 $57,600 (.32*180,000)2 $57,6003 $57,6004 $57,6005 $57,6006 $57,6007 $57,6008 $57,6009 $57,60010 $57,600Initial Investment 192000 (48,000*3+16,000*3)Required Rate of Return 0.12Present Value of Future CashFlows $325,452.85Net Present Value $133,452.85The net present value of this project is positive. First National Bank of Yukon should add the ATM machines to the Westside.4-6. First State Security Bank is planning to set up its own web page to advertise its location and services on the Internet and to offer customers selected service options, such as paying recurring household bills, verification of account balances, and dispensing deposit account and loan application forms. What factors should First State take into account as it plans its own web page and Internet service menu? How can the bank effectively differentiate itself from other banks currently present on the Internet? How might the bank be able to involve its own customers in designing its web site and pricing its Internet service package?The bank should remember that while the internet is a relatively low cost way of expanding and allows customers to find the bank rather than the bank having to find customers, there are serious concerns about privacy. In addition, the Internet is not limited by geography and while there are thousands of potential customers, there are also many financial institutions around the world competing for customer deposits and loans. The bank needs to be aware that there are many bank web pages out there and that they will need to invest in employees with the technical expertise to manage the new web site well. One of the first things the bank needs to do is to take steps to protect its customers and let its customers know what its privacy and security policies are. Another step the bank can take is to start with a customer survey to find out what its customers want and need from the bank’s Internet services. They can run this as a contest and give away some small items to the customer with the best ideas for the web page and Internet service. This should help get customers involved in the design and implementation of the web page and may help the bank start building an online customer base.。

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Articles of Association for Chinese-Foreign Equity Joint Ventures
INDEX
Chapter 1 General Provision
Chapter 2 Purpose and Scope and Scale of the Business
Chapter 3 Total Amount of Investment and the Registered Capital
Chapter 4 Board of Directors
Chapter 5 Business Management Office
Chapter 6 Finance and Accounting
Chapter 7 Profit Sharing
Chapter 8 Staff and Workers
Chapter 9 Trade Union Organization。

Chapter 4Describing Data: Displaying and Exploring Data True/False QuestionsT F 1. A dot plot and a scatter diagram are different terms for the same method.Answer: False Difficulty: Easy Goal: 1T F 2. A dot plot is an easy way to represent the relationship between two variables.Answer: False Difficulty: Easy Goal: 1T F 3. A dot plot is useful for quickly graphing the frequencies in a small data set.Answer: True Difficulty: Easy Goal: 1T F 4. A stem and leaf diagram and a dot plot are similar because each lists the actual data values.Answer: False Difficulty: Easy Goal: 1T F 5. There is some loss of information when raw data is tallied into a stem-and-leaf display.Answer: False Difficulty: Easy Goal: 2T F 6. For a stem-and-leaf display, the leaf for the value 98 is 9.Answer: False Difficulty: Easy Goal: 2T F 7. The stem in a stem-and-leaf display is the leading digit.Answer: True Difficulty: Easy Goal: 2T F 8. In a stem-and-leaf display, the leaf represents a class of a frequency distribution.Answer: False Difficulty: Easy Goal: 2T F 9. In a stem-and-leaf display, the leaf represents a member of a class in a frequency distribution.Answer: True Difficulty: Easy Goal: 2T F 10. In a stem-and-leaf display, for each class, the leaves are arranged or sorted from smallest to largest.Answer: True Difficulty: Easy Goal: 2T F 11. In a stem-and-leaf display, it is easy to find the range for a data set.Answer: True Difficulty: Easy Goal: 2T F 12. Three quartiles divide a set of data into four quarters.Answer: True Difficulty: Easy Goal: 3T F 13. A percentile divides a distribution into one hundred equal parts.Answer: True Difficulty: Medium Goal: 3T F 14. A student scored in the 85th percentile on a standardized test. This means that the student scored lower than 85% of all students who took the test.Answer: False Difficulty: Easy Goal: 3T F 15. Quartiles are another way to describe the central location of a distribution.Answer: False Difficulty: Easy Goal: 3T F 16. Quartiles are another way to describe the dispersion of a distribution.Answer: True Difficulty: Easy Goal: 3T F 17. The 50th percentile of a distribution is the same as the distribution mean.Answer: False Difficulty: Easy Goal: 3T F 18. The 2nd quartile, the 5th decile, and the 50th percentile, are the same as the median of a distribution.Answer: True Difficulty: Easy Goal: 3T F 19. The interquartile range is the difference between the values of the first and third quartile, indicating the range of the middle fifty percent of the observations.Answer: True Difficulty: Medium Goal: 4T F 20. The quartile deviation is one-fourth of the interquartile range.Answer: False Difficulty: Medium Goal: 4T F 21. A box plot is a means to graphically depict data that is in percentiles.Answer: False Difficulty: Easy Goal: 4T F 22. The "box" in a box plot shows the interquartile range.Answer: True Difficulty: Easy Goal: 4T F 23. An outlier is a data point that occurs in the first quartile.Answer: False Difficulty: Easy Goal: 4T F 24. An outlier is a value in a data set that is inconsistent with the rest of the data.Answer: True Difficulty: Easy Goal: 4T F 25. A box plot shows the relative symmetry of a distribution.Answer: True Difficulty: Medium Goal: 4T F 26. A box plot shows a distribution's mean and mode.Answer: False Difficulty: Easy Goal: 4T F 27. A box plot shows the range of values that correspond to the upper 25% of the distribution.Answer: True Difficulty: Medium Goal: 4T F 28. In a box plot, if a value is more than 1.5 times the standard deviation from the first or third quartile, the value is an outlier.Answer: False Difficulty: Easy Goal: 4T F 29. The coefficient of variation is a measure of relative dispersion, which expresses the standard deviation as a percent of the mean.Answer: True Difficulty: Medium Goal: 5T F 30. The Pearson's coefficient of skewness is a measure of distribution's symmetry.Answer: True Difficulty: Medium Goal: 5T F 31. The coefficient of variation is useful for comparing distributions with different units.Answer: True Difficulty: Easy Goal: 5T F 32. The coefficient of variation is computed by dividing the standard deviation by the median and multiplying the quotient by 100.Answer: False Difficulty: Medium Goal: 5T F 33. Negatively skewed indicates that a distribution is not symmetrical. The long tail is to the left or in the negative direction.Answer: True Difficulty: Easy Goal: 5T F 34. In a negatively skewed distribution, the mean is smaller than the median or mode and the mode occurs at the peak of the curve.Answer: True Difficulty: Easy Goal: 5T F 35. If Pearson's Coefficient of Skewness is equal to 0, then the mean and median are equal.Answer: True Difficulty: Easy Goal: 5T F 36. If Pearson's Coefficient of Skewness is negative, then the mean is greater than the median.Answer: False Difficulty: Easy Goal: 5T F 37. If Pearson's Coefficient of Skewness is negative, then the distribution is skewed to the left.Answer: True Difficulty: Easy Goal: 5T F 38. If Pearson's Coefficient of Skewness is negative, then the distribution is skewed to the right.Answer: False Difficulty: Easy Goal: 5T F 39. A scatter diagram of sales versus production may be constructed by plotting the data on a graph labeled with sales on the Y-axis and production on the X-axis.Answer: True Difficulty: Easy Goal: 6T F 40. A relationship between gender and preference for Coke or Pepsi can be best represented bya scatter diagram.Answer: False Difficulty: Easy Goal: 6T F 41. A relationship between gender and preference for Coke or Pepsi can be best represented bya contingency table.Answer: True Difficulty: Easy Goal: 7Multiple Choice Questions42. A dot plot showsA) The general shape of a distributionB) Lists the mean, median, and modeC) The relationship between two variablesD) Shows the interquartile range.Answer: A Difficulty: Easy Goal: 143. A row of a stem-and-leaf chart appears as follows: 3 | 0 1 3 5 7 9. Assume that the data is roundedto the nearest unit.A) The frequency of the class is seven.B) The minimum value in the class is 0.C) The maximum value in the class is 39.D) The class interval is 5.Answer: C Difficulty: Easy Goal: 244. The test scores for a class of 147 students are computed. What is the location of the test scoreassociated with the third quartile?A) 111B) 37C) 74D) 75%Answer: A Difficulty: Easy Goal: 345. What statistics are needed to draw a box plot?A) Minimum, maximum, median, first and third quartilesB) Median, mean and standard deviationC) A mean and a dispersionD) A mean and a standard deviationAnswer: A Difficulty: Medium Goal: 446. A box plot showsA) The mean and varianceB) The relative symmetry of a distribution for a set of dataC) The percentiles of a distributionD) The deciles of a distributionAnswer: B Difficulty: Easy Goal: 447. What do the quartile deviation and the interquartile range describe?A) Lower 50% of the observationsB) Middle 50% of the observationsC) Upper 50% of the observationsD) Lower 25% and the upper 25% of the observationsE) None of the aboveAnswer: B Difficulty: Medium Goal: 448. The coefficient of variation for a set of annual incomes is 18%; the coefficient of variation for thelength of service with the company is 29%. What does this indicate?A) More dispersion in the distribution of the incomes compared with the dispersion of their lengthof serviceB) More dispersion in the lengths of service compared with incomesC) Dispersion in the two distributions (income and service) cannot be compared using percentsD) Dispersions are equalAnswer: B Difficulty: Medium Goal: 549. Mr. and Mrs. Jones live in a neighborhood where the mean family income is $45,000 with astandard deviation of $9,000. Mr. and Mrs. Smith live in a neighborhood where the mean is$100,000 and the standard deviation is $30,000. What is the relative dispersion of the familyincomes in the two neighborhoods?A) Jones 40%, Smith 20%B) Jones 20%, Smith 30%C) Jones 30%, Smith 20%D) Jones 50%, Smith 33%E) None of the aboveAnswer: B Difficulty: Medium Goal: 550. A large oil company is studying the number of gallons of gasoline purchased per customer atself-service pumps. The mean number of gallons is 10.0 with a standard deviation of 3.0 gallons.The median is 10.75 gallons. What is the Pearson's coefficient of skewness?A) -1.00B) -0.75C) +0.75D) +1.00Answer: B Difficulty: Medium Goal: 551. What is the value of the Pearson coefficient of skewness for a distribution with a mean of 17,median of 12 and standard deviation of 6?A) +2.5B) -2.5C) +0.83D) -0.83Answer: A Difficulty: Medium Goal: 552. A study of business faculty at state supported institutions in Ohio revealed that the arithmetic meansalary for nine months is $52,000 and a standard deviation of $3,000. The study also showed thatthe faculty had been employed an average (arithmetic mean) of 15 years with a standard deviationof 4 years. How does the relative dispersion in the distribution of salaries compare with that of the lengths of service?A) Salaries about 100%, service about 50%B) Salaries about 6%, service about 27%C) Salaries about 42%, service about 81%D) Salaries about 2%, service about 6%Answer: B Difficulty: Medium Goal: 553. What is the possible range of values for the coefficient of variation?A) -1 and +1B) -3 and +3C) 0% and 100%D) Unlimited valuesAnswer: C Difficulty: Medium Goal: 554. A research analyst wants to compare the dispersion in the price-earnings ratios for a group ofcommon stock with their return on investment. For the price-earnings ratios, the mean is 10.9 andthe standard deviation is 1.8. The mean return on investment is 25 percent and the standarddeviation 5.2 percent. What is the relative dispersion for the price-earnings ratios and return oninvestment?A) Ratios = 32.0 percent, investment =19.0 percentB) Ratios =16.5 percent, investment = 20.8 percentC) Ratios =132.0 percent, investment =190.0 percentD) Ratios = 50.0 percent, investment =10.0 percentAnswer: B Difficulty: Medium Goal: 555. A study of the scores on an in-plant course in management principles and the years of service of theemployees enrolled in the course resulted in these statistics:- Mean test score was 200 with a standard deviation of 40- Mean number of years of service was 20 years with a standard deviation of 2 years.In comparing the relative dispersion of the two distributions, what are the coefficients of variation?A) Test 50%, service 60%B) Test 100%, service 400%C) Test 20%, service 10%D) Test 35%, service 45%Answer: C Difficulty: Medium Goal: 556. A large group of inductees was given a mechanical aptitude and a finger dexterity test. Thearithmetic mean score on the mechanical aptitude test was 200, with a standard deviation of 10.The mean and standard deviation for the finger dexterity test were 30 and 6 respectively. What is the relative dispersion in the two groups?A) Mechanical 5 percent, finger 20 percentB) Mechanical 20 percent, finger 10 percentC) Mechanical 500 percent, finger 200 percentD) Mechanical 50 percent, finger 200 percentAnswer: A Difficulty: Medium Goal: 557. A sample of experienced typists revealed that their mean typing speed is 87 words per minute andthe median is 73. The standard deviation is 16.9 words per minute. What is the Pearson'scoefficient of skewness?A) -2.5B) -4.2C) +4.2D) +2.5Answer: D Difficulty: Medium Goal: 558. A study of the net sales of a sample of small corporations revealed that the mean net sales is $2.1million, the median $2.4 million, the modal sales $2.6 million and the standard deviation of the distribution is $500,000. What is the Pearson's coefficient of skewness?A) -9.1B) +6.3C) -3.9D) +2.4E) None of the aboveAnswer: E Difficulty: Medium Goal: 559. In a scatter diagram, we describe the relationship betweenA) two variables measured at the ordinal levelB) two variables, one measured as an ordinal variable and the other as a ratio variableC) two variables measured at the interval or ratio levelD) a variable measure on the interval or ratio level and time.Answer: C Difficulty: Easy Goal: 660. In a contingency table, we describe the relationship betweenA) two variables measured at the ordinal or nominal level.B) two variables, one measured as an ordinal variable and the other as a ratio variableC) two variables measured at the interval or ratio levelD) a variable measure on the interval or ratio level and time.Answer: A Difficulty: Easy Goal: 7Fill in the Blank Questions61. What chart or graph is useful for illustrating frequencies? _______________________.Answer: dot plot Difficulty: Medium Goal: 162. For a stem-and-leaf display, what is the stem for the value 67? ____.Answer: 6 Difficulty: Easy Goal: 263. Construct a stem-and-leaf display for the following data:293237343822335721653552463554265559223038393120691958425051Answer:1| 92| 0 1 2 2 6 93| 0 1 2 3 4 5 5 7 8 8 94| 2 65| 0 1 2 4 5 7 8 96| 5 9Difficulty: Medium Goal: 264. From the following stem-and-leaf display, find the minimum value, the 1st quartile, the median, the3rd quartile, and the maximum value. List and interpret the interquartile range.1| 92| 0 1 2 2 6 93| 0 1 2 3 4 5 5 7 8 8 94| 2 65| 0 1 2 4 5 7 8 96| 5 9Answer:Minimum=191st quartile = 29.75median = 37.53rd quartile = 52.5Maximum = 69.Interquartile range is 52.5-29.75 = 22.75. It means that 50% or 15 of the 30 observations are between 52.5 and 29.75 Difficulty: Medium Goal: 465. For a stem-and-leaf display, what is the leaf for the value 123? ____.Answer: 3 Difficulty: Easy Goal: 266. If you are constructing a stem-and-leaf display, the "3" in 19.3 would be the ____________.Answer: leaf Difficulty: Medium Goal: 267. If you are constructing a stem-and-leaf display, the "20" in 20.5 would be the _____________.Answer: stem Difficulty: Medium Goal: 268. What is the best way to display the relationship between two variables measured on an interval orratio level?Answer: scatter diagram Difficulty: Medium Goal: 669. What is the main advantages of a stem-and-leaf chart over a histogram? ___________________Answer: The identity of each observation is not lost Difficulty: Easy Goal: 270. The percentile range is the distance between any two _______________.Answer: percentiles Difficulty: Medium Goal: 371. In a symmetric distribution, where is the 99th percentile located? _______________Answer: In the far right tail Difficulty: Medium Goal: 372. In a positively skewed distribution, where is the 99th percentile located? _______________Answer: In the far right tail Difficulty: Medium Goal: 373. In a negatively skewed distribution, where is the 1st percentile located? _______________Answer: In the far left tail Difficulty: Medium Goal: 374. If the mean of a distribution is smaller than the median and mode, what is the sign of Pearson'scoefficient of skewness? _______________Answer: negative Difficulty: Medium Goal: 575. A frequency distribution may be divided into how many percentiles? ___Answer: 99 Difficulty: Medium Goal: 376. For a set of data, how many quartiles are there? _____Answer: three Difficulty: Medium Goal: 377. If two sets of data are in different units, we can compare the dispersion by using?___________________________________Answer: coefficient of variation Difficulty: Medium Goal: 578. What unit of measurement is used to express the coefficient of variation? _________Answer: percent Difficulty: Medium Goal: 579. The coefficient of variation is a measure of _______________.Answer: relative dispersion Difficulty: Medium Goal: 580. The research director of a large oil company conducted a study of the buying habits of consumerswith respect to the amount of gasoline purchased at full-service pumps. The arithmetic mean amount is 11.5 gallons and the median amount is 11.95 gallons. The standard deviation of the sample is 4.5 gallons. What is the Pearson's coefficient of skewness? ________Answer: -0.30 Difficulty: Hard Goal: 581. Rainbow Trout, Inc. feeds fingerling trout in special ponds and markets them when they attain acertain weight. A group of 9 trout (considered the population) were isolated in a pond and fed a special food mixture called Grow Em Fast. At the end of the experimental period, the weights of the trout were (in grams): 124, 125, 123, 120, 124, 127, 125, 126 and 121. Another special mixture, Fatso 1B, was used in another pond. The mean of the population was computed to be 126.9 grams and the standard deviation was 1.20 grams. Which food results in a more uniform weight?____________Answer: Fatso 1B Difficulty: Hard Goal: 582. The annual incomes of the five vice presidents of Elly's Industries are: $41,000, $38,000, $32,000,$33,000 and $50,000. The annual incomes of Unique, another firm similar to Elly's Industries, were also studied and found to have a mean of $38,900 and a standard deviation of $6,612. What company has the greater coefficient of variation? ______________Answer: Elly, (19.0) > Unique (17.0) Difficulty: Hard Goal: 583. The spread in the annual prices of stocks selling under $10 and those selling over $60 are to becompared. The mean price of the stocks selling under $10 is $5.25 and the standard deviation is $1.52. The mean price of those stocks selling over $60 is $92.50 and the standard deviation is $5.28. Why should the coefficient of variation be used to compare the dispersion in the prices?______________________Answer: means differ vastly Difficulty: Medium Goal: 584. The lengths of stay on the cancer floor of Community Hospital were organized into a frequencydistribution. The mean length was 28 days, the median 25 days and the modal length 23 days. The standard deviation was computed to be 4.2 days. What is the Pearson's coefficient of skewness?__________Answer: 2.14 Difficulty: Medium Goal: 585. A sample of the homes currently offered for sale revealed that the mean asking price is $75,900, themedian $70,100 and the modal price is $67,200. The standard deviation of the distribution is $5,900. What is the Pearson's coefficient of skewness? __________Answer: 2.95 Difficulty: Medium Goal: 586. The Pearson's coefficient of skewness (Sk) measures the amount of skewness and may range from-3.0 to +3.0. It is computed by subtracting the median from the mean, multiplying the result by 3 and dividing by? ________________Answer: standard deviation Difficulty: Hard Goal: 587. Given the sample information in the following table regarding public opinion on gun control, whois more likely to favor gun control?O pinion on G un ControlParty A ffiliation Favor O ppose N o opinion TotalD em ocrat909846234Republican905410154 Total180********Answer: Republicans are more likely to favor gun control with 58% favoring gun control. Only38% of democrats favor gun control. Difficulty: Medium Goal: 7Use the following to answer questions 88-92:A telemarketing firm is monitoring the performance of its employees based on the number of sales per hour. One employee had the following sales for the last 20 hours88. What is the median for the distribution of number of sales per hour? ____________Answer: Median = 5 sales per hour Difficulty: Medium Goal: 489. What is the first quartile for the distribution of number of sales per hour? ________________Answer: Q1 = 4 sales per hour Difficulty: Medium Goal: 490. What is the third quartile for the distribution of number of sales per hour? _____________Answer: Q3 = 6.5 sales per hour Difficulty: Medium Goal: 491. For the distribution of number of sales per hour, 50% are greater than ____________Answer: The median or 5 sales per hour Difficulty: Medium Goal: 492. For the distribution of number of sales per hour, 50% of the observations are between __________and ____________.Answer: Q1 (4) and Q3 (6.5) Difficulty: Medium Goal: 4。

工商管理相关英文书籍Essentials of Business Administration: A Comprehensive Guide.Introduction.In the dynamic world of business, the role of effective management is paramount. Business administration, as a field, encompasses a wide range of disciplines and practices that aim to optimize organizational performance and achieve strategic goals. This comprehensive guide explores the essentials of business administration, providing readers with a solid foundation in the principles and practices that underlie successful management.Chapter 1: Overview of Business Administration.Business administration is the discipline that deals with the management of businesses and organizations. It involves the planning, organizing, directing, andcontrolling of activities to achieve desired goals. The field covers various areas such as accounting, marketing, human resources, operations, and strategy.The primary functions of business administration include decision-making, coordinating resources, leading people, and ensuring compliance with legal and ethical standards. Effective managers must possess a blend of technical skills, people skills, and strategic insight to guide their organizations towards success.Chapter 2: The Managerial Process.The managerial process is the core of business administration. It involves five key activities: planning, organizing, leading, controlling, and evaluating.Planning involves setting goals and developing strategies to achieve them. Organizing involves dividing work among employees, assigning responsibilities, and creating structures and procedures. Leading involves motivating and guiding employees towards achieving theorganization's goals. Controlling involves monitoring progress and making necessary adjustments to ensure that plans are being followed. Evaluating involves assessing the effectiveness of the managerial process and making improvements where necessary.Chapter 3: Key Areas of Business Administration.Marketing: Marketing is the process of promoting and selling products or services to customers. It involves understanding customer needs, developing appropriate products or services, promoting them effectively, and distributing them to the target market. Marketing managers must stay abreast of trends, competition, and technology to ensure that their organizations maintain a competitive edge.Finance: Finance is the area of business administration that deals with the management of money and other financial assets. It involves raising funds, allocating them to different projects or investments, and ensuring that the organization's financial position remains healthy.Financial managers must have a deep understanding offinancial statements, ratios, and market trends to make informed decisions.Human Resources: Human resources (HR) is the area responsible for managing the people within an organization. It involves recruiting, selecting, training, and developing employees, as well as administering compensation and benefits programs. HR managers must ensure that the organization has the right people in the right positions, and that these people are motivated and engaged.Operations: Operations management deals with the production and delivery of goods and services. It involves managing the physical resources of the organization, such as facilities, equipment, and inventory, to ensureefficient and effective production. Operations managers must ensure that the organization's processes are optimized to maximize productivity and minimize waste.Strategy: Strategy is the long-term plan of an organization, aiming to achieve its mission and vision. It involves analyzing the external environment, understandingthe organization's internal strengths and weaknesses, and developing a plan to achieve competitive advantage. Strategic managers must have a broad perspective and the ability to think creatively about how to position their organizations for success.Chapter 4: The Future of Business Administration.The field of business administration is constantly evolving, driven by technological advancements, globalization, and changing consumer behaviors. Future trends in business administration include the increasing importance of data analytics and artificial intelligence in decision-making, the rise of remote work and virtual teams, and the need for more sustainable and ethical business practices.Managers must stay up-to-date with these trends and adapt their strategies and practices accordingly. They must also focus on developing their own skills and capabilities, particularly in areas such as leadership, innovation, and cross-functional collaboration.In conclusion, business administration is a critical discipline that covers a wide range of topics and practices essential for organizational success. It requires a blend of technical knowledge, people skills, and strategicinsight to effectively manage and lead organizations in today's dynamic business environment. By staying abreast of trends and continuously developing their skills, managers can ensure that their organizations remain competitive and thrive in the future.。

国际商务题库Chapter4C HAPTER 4E CONOMIC S YSTEMS AND D EVELOPMENTTRUE/FALSE QUESTIONS1. China is developing its economy based on natural resources and cheap labor while India is relying on the brainpower of its people.2. Incentives and rewards for individual business initiatives are an important component of collectivist cultures.3. Collectivist cultures tend to offer fewer incentives and rewards than individualist cultures.4. Entrepreneurs are businesspeople who accept the risks and opportunities involved in creating and operating new business ventures.5. A country’s economic system consists of the structure and processes it uses to allocate its resources and conduct its commercial activities.6. Similar to how national cultures are neither completely individualistic or completely collectivist, no economic system reflects a completely individual or group orientation.7. In a centrally planned economy, entrepreneurs own a nation’s land, factories and other economic resources in a strategic fashion.8. In a centrally planned economy, the government makes nearly all economy-related decisions including who produces what and the prices of products, labor, and capital.9. Central planning is rooted in the ideology that the welfare of the group is more important than individual well-being.10. German philosopher Helmut Newton popularized the idea of central planning in the nineteenth century.11. Nearly all economic-related decisions in a centrally planned economy are determined by the interplay of supply and demand.12. In a market economy, the majority of a nation’s land, factories, and other economic resources are government owned.13. The price mechanism dictates supply and demand in a market economy.14. Market economics is rooted in the belief that group concerns should be placed above individual well-being.15. Canada and the United States are examples of contemporary market economies.16. One key feature of a market economy is price flexibility, which allows most prices to rise and fall to reflect the forces of supply and demand.17. Free choice in a market economy gives individuals access to alternative purchase options.18. Free enterprise in a market economy gives companies the ability to decide which goods andservices to produce and the markets in which to compete.19. A monopoly occurs when one company is able to control a product’s supply and, therefore,its price.20. Technological dualism occurs when a country uses the latest technologies in its economy butexports outdated technologies to developing countries.21. Managers in the poorest transitional countries tend to lack training in all areas of businessmanagement.22. Transition replaces a people’s dependence on government with greater reliance on socialwelfare and unemployment benefits.23. Political instability in the form of intensified nationalism is threatening Russia’s furtherprogress toward transition.24. The absence of a well-functioning tax code is one major problem facing Russia today.25. Russia has established a strong tax revenue system to fund its transition to a market economy. MULTIPLE CHOICE QUESTIONS1. In most failed centrally planned economies, ________.a. market conditions helped determine who produced what goodsb. prices of products were a function of supply and demandc. central planning agencies specified production goals and decided pricesd. central planners paid a great deal of attention to efficiency2. In which of the following systems is a nation’s land, factories, and other economic resourcesowned by the government?a. Mixed economyb. Public economyc. Market economyd. Centrally planned economy3. Who makes nearly all economy-related decisions in a centrally planned economy?a. Consumersb. Entrepreneursc. Governmentd. Employees4. All the following are true of centrally planned economies EXCEPT ________.a. government determines who produces what productsb. government determines the prices of products and laborc. factories are privately ownedd. government sets production goals5. Who popularized the idea of central economic planning?a. Jiang Zeminb. Karl Marxc. Mikhail Gorbachevd. Henry Fayol6. All the following factors contributed to the collapse of centrally planned economies EXCEPT ________.a. failure to provide incentivesb. failure to satisfy consumer needsc. failure to create political valued. failure to measure up7. Factors contributing to the collapse of centrally planned economies include all the following EXCEPT ________.a. little attention was paid to the task of producing quality goods and services at thelowest possible costb. government ownership of economic resources reduced incentives for people and organizations to maximize the benefits obtained from the resourcesc. economic growth in countries like Hong Kong, Singapore, South Korea, and Taiwantook opportunities away from the centrally planned economies and caused economic distressd. would-be consumers in many centrally planned economies were tired of standards of living that had slipped far below those of their counterparts in market economies8. North Korea practices a policy of self reliance that it calls ________.a. guanxib. laissez-fairec. juched. privatization9. Which of the following was NOT true of centrally planned economies?a. At the time of their collapse, standards of living in most centrally planned economieswas at or above that of market economies.b. Basic necessities were often not provided to citizens in centrally planned economies.c. Underground economies for goods and services thrived in most centrally planned economies.d. Prices on the black market were much higher than the official prices set by governments.10. When the government controls the economic sectors it considers important to nationalsecurity and long-term stability, it is said to have a(n) ________ economic system.a. marketb. mixedc. centrally plannedd. open11. France, Germany, and Sweden are examples of ________.a. centrally planned economiesb. market economiesc. closed economiesd. mixed economies12. All of the following comprise the ultimate goal of a mixed economy EXCEPT ________.a. low unemploymentb. low povertyc. low economic growthd. an equitable distribution of wealth13. Extensive government ownership of assets in centrally planned and mixed economies tends to result in ________.a. a lack of responsibility and accountabilityb. defective productsc. rising costsd. slow economic growthe. all of the above14. The sale of government-owned economic resources to private operators is called ________.a. the price mechanismb. laissez-faire economicsc. privatizationd. guanxi15. The main goal of privatization is to ________.a. lower responsibility and accountabilityb. increase economic efficiencyc. increase subsidies to companiesd. slow economic growth16. In a ________, the majority of a nation’s land, factories, and other economic resources are privately owned by individuals or businesses.a. market economyb. centrally planned economyc. communist systemd. mixed economy17. In a market economy, nearly all economy-related decisions are determined by the interplay of ________.a. government and individualsb. supply and demandc. customers and employeesd. large and small businesses18. Supply and demand in a market economy are dictated by what is called ________.a. privatizationb. the black marketc. the price mechanismd. government intervention19. Market economics is rooted in the belief that ________.a. group concerns should be placed above individual concernsb. individual concerns should be placed above group concernsc. neither individual or group concerns are importantd. totalitarianism enhances a country’s economic well-being20. Unstable economies are often characterized by ________.a. high employmentb. low interest rates and low inflationc. high economic growthd. high inflation and high unemployment21. Inflation can be controlled through ________.a. stable pricing policiesb. fiscal and monetary policiesc. monitoring competitiond. effective trade policies22. Fiscal policies deal directly with ________.a. taxing imports and exportsb. monitoring consumer spendingc. taxation and government spendingd. controlling the money supply and interest rates23. Monetary policies deal directly with ________.a. taxing imports and exportsb. monitoring consumer spendingc. controlling the money supply and interest ratesd. taxation and government spending24. ________ policies are used to control the money supply and interest rates.a. Fiscalb. Monetaryc. Bureaucraticd. Development25. Government can help control inflation through which of these?a. Effectively raising pricesb. Increasing consumer spendingc. Effective monetary policiesd. Effective fiscal policiese. Both c and d26. Which of the following is NOT true?a. Economic freedom guarantees a high per capita income.b. Countries with the greatest economic freedom tend to have the highest standards of living.c. Countries with the lowest economic freedom tend to have the lowest standards of living.d. The connection between economic freedom and economic growth is not at all certain.27. The economic well-being of one nation’s people compared with that of another nation’s people is reflec ted in the country’s ________.a. level of trade developmentb. level of capital developmentc. level of economic developmentd. purchasing power parity28. A country’s level of economic development reflects all of the following EXCEPT its________.a. economic outputb. currency value relative to that of other countriesc. infrastructured. people’s physical health and level of education29. The broadest measure of economic development is ________.a. gross domestic product (GDP)b. purchasing power parity (PPP)c. gross national product (GNP)d. human development index (HDI)30. The human development index (HDI) measures the extent to which a government satisfies itspeople’s needs along all the following dimensions EXCEPT ________.a. a decent standard of livingb. a long and healthy lifec. an educationd. rapid economic development31. The United Nations’ human development index ________.a. is another name for purchasing power parityb. measures the extent to which a people’s needs a re satisfied and the degree to whichthese needs are addressed equally across a nation’s entire populationc. measures the extent to which a people’s needs are satisfied according to their abilityto buy a home, finance an education, and find steady employmentd. incorporates life expectancy, educational attainment, and family size32. Highly industrialized, highly efficient countries whose people enjoy a high quality of life arecalled ________.a. developed countriesb. newly industrialized countriesc. emerging marketsd. super-rich countries33. Australia, Canada, Japan, and New Zealand are all ________ countries.a. developedb. newly industrializedc. less-developedd. emerging34. A country that has recently increased the portion of its national production and exportsderived from industrial operations is called a(n) ________.a. developed countryb. newly industrialized countryc. emerging marketd. developing country35. When we combine newly industrialized countries with countries that have the potential to become newly industrialized, we arrive at a category called ________.a. developed countriesb. newly industrialized countriesc. emerging marketsd. developing countries36. Most newly industrialized countries are found in ________.a. Asia and Latin Americab. Latin America and Europec. Asia and Europed. None of the above37. Nations having the poorest infrastructures and lowest personal incomes are called ________.a. developed countriesb. newly industrialized countriesc. emerging marketsd. developing countries38. Countries that make use of the latest technologies in some sectors of the economy coupledwith the use of outdated technologies in other sectors are said to be characterized by a highdegree of ________.a. povertyb. technological dualismc. uneven income distributiond. economic transition39. Economic transition refers to the process of moving from ________.a. developing to developed economicsb. central planning to free-market economicsc. newly industrialized to developed economicsd. free-market to centrally planned economics40. Which of the following is NOT true of Russia as it moves forward with its transition to a market economy?a. Managerial talent needs to be fostered.b. The country needs tax revenue to establish the institutions essential to the functioningof a market economy.c. The country can consider its battle to wipe out organized crime a success.d. Political instability remains a threat.SHORT-ANSWER QUESTIONS1. ________ refers to the sale of government-owned economic resources to private operators.2. The main goal of privatization is to increase ________ and ________.3. In a(n) ________, the majority of a nation’s land, factories, and other economic resources areprivately owned by individuals or businesses.4. The quantity of a good or service that producers are willing to provide at a specific sellingprice is called ________.5. ________ is the quantity of a good or service that buyers are willing to purchase at a specificselling price.6. Supply and demand are dictated by what is called the ________.7. The approach to national economics that calls for less government interference in commerceand greater individual economic freedom is called ________.8. To function smoothly and properly, a market economy requires three things: free choice,________, and price flexibility.9. ________ in a market economy gives individuals access to alternative purchase options.10. The economic well-being of one nation’s people as compared with that of another nation’speople is reflected in the country’s ________.11. The broadest measure of economic development is ________.12. When we add to a nation’s GDP the income generated from exports, imports, and theinternational operations of its companies over a one-year period, we arrive at a measurecalled ________.13. ________ is the value of all goods and services produced by a nation’s domestic economyover a one-year period.14. A country’s ________ is simply its gross national product divide d by its population.15. ________ is the exchange of goods and services for other goods instead of money.16. The value of goods and services that can be purchased with one unit of a country’s currencyis called ________.17. Relative ability of two cou ntries’ currencies to buy the same basket of goods in those twocountries is called ________.18. The ________ measures the extent to which a government satisfies its people’s needs and thedegree to which these needs are addressed equally across a nation’s population.19. ________ countries are highly industrialized, highly efficient, and their people enjoy a highquality of life.20. ________ is the process by which a nation changes its fundamental economic organization and creates new free-market institutions.ESSAY QUESTIONS1. Describe each of the three main types of economic systems.2. Explain why many mixed economies are converting to market-based systems.3. Explain what a market economy is and what it requires to function smoothly.4. Discuss the varied roles of government in a market economy.5. Discuss the importance of economic development for international business.6. Differentiate between GDP and GNP. Briefly discuss the drawbacks of using GDP and GNP as indicators of economic development.7. Describe the main points of difference between purchasing power parity and the human development index.8. Discuss the three overall classifications of countries. Provide an example country for each classification.9. What is economic transition? Describe the remaining obstacles that countries face in their economic transition.10. Explain how a lack of managerial expertise has affected former centrally planned countries as they transition to market economies.11. What is the role of privatization in economic transition?12. Compare and contrast the transition and challenges faced by China and Russia.。