Mgmt 423- Test 1

Front 1

what is businesses/corporations responsibility for the common good?

Back 1

1. supporting
2. preserving
3. not depleting

Front 2

what did stock options incent CEO's to do and not to do?

Back 2

Do- consider themselves
accounting shinanigans
buyback options
anything to increase share price

not do- not report honestly

Front 3

compensation

Back 3

gain, return that is proportionally greater than contribution, benefit, value added is theft/profit

Front 4

Invisible hand theory

Back 4

in a free market, a person persuing only his/her own self interests benefits the whole although having no intention to do so.

Front 5

two advocates of the invisible hand encourage deliberate amorality in the executive suite. how do they jusify this

Back 5

they contend that this results in systemic morality due to the action of the invisible hand

Front 6

what does milton friedman see as teh social responsibility of corporations?

Back 6

to only pursue profit but within the law

Front 7

according to bishop, when corporations combine to restrict wages, does smith see this as an infringement on the free market

Back 7

yes

Front 8

how did adam smith view international investment as opposed to investing in one's own country?

Back 8

only by investing in one's own country can one achieve the free market benefit of maximizing revenue as predicted by the invisible hand
2. there was no international free market nor did he believe one would ever exist

Front 9

what did adam smith say about foreign trade

Back 9

trade for what you can buy cheaper than you can make it

Front 10

did he believe that foreign trade could increase the wealth of a nation?

Back 10

yes to a point, provided the profit made is rolled back into domestic production

Front 11

did adam smith assume that profits made from foreign trade would be invested in the trader's own country creating more domestic production and jobs? basic for this assumption>

Back 11

smith believed that profits made from foreign trade would be invested back in the traders own country where she/he could watch over it and manage what is done with it

Front 12

are profits tha are made today from US corporate foreign trade being invested more in the US or more abroad? is the wealth in the US increasing?

Back 12

most accounts would indicate that such profits are being invested abroad adn often as a strategy to further reduce taxes

Front 13

what did adam smith say about tariffs and duties imposed on imported gods that are intended to protect domestic industry?

Back 13

he said they aided in creating domestic monopolies that end up raising prices

Front 14

under what two circumstances does adam believe tariffs are justified?

Back 14

1. to protect defense industries
2. to impose tariffs or duties to imports equal to any taxes or fees imposed domestically on domestically produced goods.

Front 15

define common good

Back 15

that which benefits all, is available to all, can be shared by all

Front 16

list five things that could be considered as elements of the common good

Back 16

1. infrastructure
2. security
3. justice
4. civil community life
5. economic system

Front 17

how does the concept of common good differ from the concept of private gain?

Back 17

private gain is only for the individual; common good is shared by all

Front 18

which of these is emphasized in the US today?

Back 18

private gain

Front 19

current business practices differ from those in early colonial america. name 3 ways that change may have affected the common good.

Back 19

1. polluted the environment
2. left many without adequate health care
3. depleted the nations natural resources

Front 20

the commons

Back 20

shared land (public resources, parks, minerals, etc.)

Front 21

security

Back 21

actual and psychological

Front 22

community life

Back 22

civil, harmonious relations between individuals and groups

Front 23

family life

Back 23

good environment for families raising children

Front 24

justice

Back 24

resolving disputes and injuries

Front 25

infrastucture

Back 25

roads, waste disposal, water and utilities

Front 26

governance and public service

Back 26

effective, honest, answerable

Front 27

enterprise

Back 27

conducive conditions for gaining the means of life

Front 28

welfare

Back 28

protection from poverty

Front 29

environment

Back 29

clean, attractive air, water, land

Front 30

social security

Back 30

for teh aging

Front 31

public education

Back 31

schooling for all that prepares for life and career

Front 32

assistance for needy

Back 32

neighbors, charities, government helping disabled, mentally handicapped, elderly

Front 33

for what purposes does the constitution empower congress to lay and collect taxes, duties, imposts, and excises

Back 33

1. pay national debts
2. provide for teh common defense
3. provide for general welfare

Front 34

what powers does teh last paragraph of section 8 give congress?

Back 34

to make all laws necessary and proper for carrying into execution the foregoing powers vested by the constitution in the government and anky department thereof

Front 35

what does the constitution say about interstate commerce

Back 35

it gave power to the federal gov to regulate interstate commerce and prohibited the states from charging duties or taxes for commerce flowing across state lines.

Front 36

section 10 grants the states an exception that allows them to impose duties and imposts. for waht purpose?

Back 36

to collect only whta is absolutely necessary for executing inspections

Front 37

given that exception what does the constitution stipulate the use of any duties or imposts laid by the states on imports or exports

Back 37

that the proceeds be for the use of the treasury of the US

Front 38

what govermental body has jurisdiction of public federal lands within the various states

Back 38

US congress

Front 39

amendment 1

Back 39

prohibits establishment of a national religion, protects free speech, assembly, petition, etc.

Front 40

amendment 2

Back 40

right to keep and bear arms

Front 41

amendment 3

Back 41

no quartering of troops

Front 42

amendment 4

Back 42

protection against unreasonable search and seizure; search warrants required; probable cause required

Front 43

amendment 5

Back 43

cannot be compelled to testify against self, no double jeopardy, requires due process

Front 44

amendment 6

Back 44

speedy trial, impartial jury, right to be confronted by witnesses, righ to counsel

Front 45

amendment 7

Back 45

common law suits, right to trial by jury

Front 46

amendment 8

Back 46

prohibits excessive bail and cruel and unusual punishment

Front 47

amendment 9

Back 47

powers and rights given to congress do not preclude others retained by the people

Front 48

amendment 10

Back 48

the powers not delegated to the US congress, nor prohibited to the states are reserved to the states or to the people

Front 49

amendment 13

Back 49

frees the slaves, emancipation

Front 50

amendment 24

Back 50

freed slave shall not be deprived life, libery or property with due process; equal proteciton of the laws

Front 51

what is the name of the economic theory that justified the CEO stock option practices described in the article

Back 51

principal-agent theory

Front 52

describe that theory

Back 52

to incent the agent(CEO) to act in the interest of the principal(shareholder) by providing a type of compensation that gave CEOs a stake in the game similar to that of shareholders, in this case, stock options.

Front 53

how does the principle of shareholder return relate to other stakeholders interests? what stakeholders are likely to benefit and which harmed?

Back 53

the principle of maximize shareholder returns tends only to benefit the major shareholders (today, mostly financial fund managers). Small shareholders are often hurt as are customers, employees, and communities.

Front 54

in practice what kind of shareholder return was emphasized by the incentive that stock options gave CEO's

Back 54

increasing share prices

Front 55

how did CEO stock options contribute to the recent corporate corruption? what are some possible corrections

Back 55

CEOs of major banks and fund managers were incented to make very risky investments and to cash in despite the crashe they caused

Front 56

what is the name and type of business of the company that bogle founded?

Back 56

founder and CEO of the vanguard group inc. the 2nd largest mtual fund

Front 57

what did bogle think about the wall streeet banking and investment industries?

Back 57

they subtract from the value created by ur productive businesses

Front 58

what strategies did bogle say tha the nations economy had passed through over the past two centuries? what is the current stage and does it add to or subtract from the value created by our productive businesses?

Back 58

-agricultural
-manufacturing
-service
-financial

Front 59

how much money did bogle say was being drained from the economy by these industries in 2007 and 2008

Back 59

2007- 500 billion
2008- 650 billion

Front 60

what did bogle say is the likely percentage of S&P annual profits generated by the finance sector? How does that compare to the energy, health care, and IT sectors?

Back 60

-33%
-larger than combined profits of energy and health care; 3x as much as manufacturing and IT

Front 61

does bogle suggest that the US economy is healthy and making things that the world will buy or simply trading pieces of paper, swapping stocks and bonds back and forth

Back 61

simply trading pieces of paper back and forth

Front 62

does bogle seem to agree with keynes that the financial markets are like a casino? what doe sthe word croupier mean?

Back 62

-yes
-croupier-someone who collects and pays money at the gaming table