FBLA Business Law and Ethics 2 — Questions and Answers
Question 1: What is 'corporate social responsibility' (CSR)?
- A company's legal requirement to pay taxes
- A business's commitment to ethical behavior and positive social impact (Correct answer)
- The process of auditing financial statements
- A strategy for maximizing shareholder profit only
Correct answer: A business's commitment to ethical behavior and positive social impact
CSR refers to a company's voluntary efforts to operate ethically, contribute to societal goals, and consider stakeholder interests beyond profit.
Question 2: What does 'due diligence' mean in a business transaction?
- Paying invoices on time
- Thoroughly investigating and verifying information before completing a deal (Correct answer)
- Filing required government reports
- Training employees on compliance
Correct answer: Thoroughly investigating and verifying information before completing a deal
Due diligence is the comprehensive investigation of a business or investment opportunity to verify facts and identify risks before proceeding.
Question 3: Which federal agency enforces U.S. antitrust laws to prevent anti-competitive business practices?
- Securities and Exchange Commission (SEC)
- Federal Trade Commission (FTC) (Correct answer)
- Consumer Financial Protection Bureau (CFPB)
- Occupational Safety and Health Administration (OSHA)
Correct answer: Federal Trade Commission (FTC)
The FTC (Federal Trade Commission) enforces antitrust laws and works to prevent unfair or deceptive business practices.
Question 4: What is 'whistleblowing' in a business ethics context?
- Promoting company products publicly
- Reporting illegal or unethical conduct within an organization (Correct answer)
- Terminating an underperforming employee
- Announcing quarterly earnings results
Correct answer: Reporting illegal or unethical conduct within an organization
Whistleblowing involves an employee or insider reporting misconduct, fraud, or illegal activity within their organization to authorities.
Question 5: What is a 'trademark'?
- Protection for an inventor's new product for 20 years
- A word, symbol, or design that identifies a company's goods or services (Correct answer)
- Copyright on a written work
- A license to operate in a specific territory
Correct answer: A word, symbol, or design that identifies a company's goods or services
A trademark is a recognizable sign or symbol that distinguishes a company's products or services from competitors.
Question 6: Which type of business ownership involves two or more people sharing management and profits?
- Sole proprietorship
- Franchise
- Partnership (Correct answer)
- Corporation
Correct answer: Partnership
A partnership is a business owned and operated by two or more individuals who share responsibilities, profits, and liabilities.
FBLA Business Law and Ethics 2
What is 'corporate social responsibility' (CSR)?