Chapter 3

Question 1

Growth rates, interest rates, and levels of employment would be considered ____ factors in a firm’s general environment

Answer 1

Economic

Question 2

Through the PESTEL model, firms are able to do which of the following?

Answer 2

-Evaluate external trends and monitor external factors

Question 3

In the PESTEL model, political factors are those that relate to______

Answer 3

Government bodies

Question 4

The overall ___ is a measure of the change in the amount of goods and services produced by a nation’s economy

Answer 4

Economic growth rate

Question 5

Why are political pressures related to legal factors?

Answer 5

political pressure may lead to changes in law

Question 6

The economic recession that began in 2008 in the United States was the result of unwise investment in

Answer 6

real estate

Question 7

In order to influence changes in their political environment, firms pursue

Answer 7

Nonmarket strategies

Question 8

The economic factors that affect a firm’s external environment are

Answer 8

Largely macroeconomic

Question 9

In a period of economic boom, unemployment is ___, and human resources become expensive

Answer 9

low

Question 10

According to PESTEL model, which of the following are kinds of forces that exist in the general external government

Answer 10

Technological, ecological, and economic

Question 11

A rise in economic growth is reflected by

Answer 11

Businesses expanding operations to satisfy demand

Question 12

In early 2000s, easy credit made real estate the investment of choice in the US. by the end of the decade, however a recession had set in, impacting almost all businesses in the country. what does this example show?

Answer 12

Economic boom periods can overheat and lead to speculative bubbles

Question 13

The amount that savers are paid for use of their money and the amount that borrowers pay for that use is known as

Answer 13

interest rate

Question 14

Which are employed as nonmarket strategies to influence government bodies?

Answer 14

Litigation, lobbying, and public relations

Question 15

Price ___ means theres little or no change in the prices of goods

Answer 15

stability

Question 16

It might be a good idea to expand or upgrade a firm;s human capital base during a ____ because unemployment is high and therfore human capital is abundant and wages usually ____

Answer 16

downturn, fall

Question 17

The overall ___ is a measure of the change in the amount of goods and services produced by a nations economy

Answer 17

economic growth rate

Question 18

Through PESTEL model, firms are able to do what?

Answer 18

-evaluate external trends
-monitor external factors

Question 19

What is the most frequent cause of inflation

Answer 19

Too much money chasing too few goods and services

Question 20

Consumers tend to buy homes, automobiles, and computers when interest rates are __ because credit is inexpensive

Answer 20

low

Question 21

Negative effect of inflation is

Answer 21

It reduces purchasing power

Question 22

Which are reasons that price stability is hard to achieve

Answer 22

• the central bank’s actions are unpredictable
  -measurements of gross domestic product may be incorrect
  -economic growth is dynamic

Question 23

The ____ rate determines how many dollars one must pay for a unit of foreign currency

Answer 23

currency exchange

Question 24

Which are examples of sociocultural factors

Answer 24

-growth of hispanic population
-increased number of conscious consumers

Question 25

Which term descrobes an increase in the overall price level

Answer 25

inflation

Question 26

The cultures, norm, values, of a society in which a firm competes are considered_____

Answer 26

sociocultural

Question 27

Deflation is a serious threat to economic growth for which of the following reasons?

Answer 27

-it stops companies from investing in new production capacity because they expect a further decline in prices -it distorts expectations about the future

Question 28

What is true about the external forces called technological factors?

Answer 28

They capture the application of knowledge to create new process and products

Question 29

If the US dollar depreciates compared to the euro, it will take ___ dollars to buy one euro

Answer 29

more

Question 30

The relationship between the natural environment and business organizations can best be described as

Answer 30

Interdependent

Question 31

True or false: Sociocultural factors are constantly in flux and also differ across groups

Answer 31

True, bc sociocultural factors capture a society's cultures, norms, and values.

Question 32

What is demographic factors

Answer 32

-sexual orientation -age -gender

Question 33

_____ occurs when producing or consuming goods and services results in costs or benefits that aren't captured by the prices charged for the goods or services

Answer 33

Externalities

Question 34

What is a negative effect of inflation

Answer 34

it reduces purchasing power

Question 35

Which of the following is an example of a major innovation in process technology

Answer 35

lean manufacturing

Question 36

global warming would be an example of a __ factor in a firm's external environment

Answer 36

ecological

Question 37

which is sociocultural factors

Answer 37

-growth of the hispanic population -increased number of health-conscious consumers

Question 38

What term describes the costs benefits of producing or consuming goods that are NOT captured by prices of the goods?

Answer 38

externalities

Question 39

Which are examples of negative externalitites

Answer 39

-toxic emissions -noise pollution -untreated wastewater

Question 40

When companies seek ways to recharge car batteries in a sustainable way, it is an example of ___ factors creating business opportunities

Answer 40

Ecological

Question 41

sociocultural factors are constantly in flux and also differ across groups

Answer 41

true

Question 42

which of the following are factors in a firm's legal environment

Answer 42

-laws -mandates -regulations

Question 43

_____ occur when producing or consuming goods and services results in costs or benefits that aren't captured by the prices charged for the goods or services

Answer 43

externalities

Question 44

Which are most important elements of industry effects

Answer 44

-entrance and exit barriers -types of products and services -number of companies

Question 45

From the perspective of firm effects, what is the major factor in firm performance

Answer 45

strategic actions by managers

Question 46

The relationship between firms and the natural environment must be adversarial

Answer 46

FALSE

Question 47

Deregulation of industries leads to intensified competition and higher value at lower prices for consumers. This is an example of ____ factors influencing business

Answer 47

legal

Question 48

The costs and benefits of producing or consuming goods that are not captured by prices of the goods

Answer 48

externalties

Question 49

An industry analysis provides which of the following?

Answer 49

-insight into a firm's strategic position within an industry -a rigorous way of identifying the industry's profit potential -The level of profitability that can be expected for the average firm in the industry

Question 50

___ effects result from the basic economic structure of an entire field

Answer 50

industry