FBLA Business Law and Ethics 3

Question 1

What is 'arbitration' as an alternative to litigation?

Accepted Answer

A private dispute resolution process where a neutral third party makes a binding decision

Answer

A government-mandated court proceeding

Answer

Informal negotiation between two parties

Answer

A mediation process with no binding outcome

Question 2

What is the purpose of a 'non-disclosure agreement' (NDA)?

Accepted Answer

To protect confidential information from being shared with unauthorized parties

Answer

To outline the terms of employment

Answer

To register a business with the state

Answer

To transfer ownership of intellectual property

Question 3

Which ethical framework judges the morality of an action based solely on its outcomes?

Accepted Answer

Utilitarianism

Answer

Deontological ethics

Answer

Virtue ethics

Answer

Divine command theory

Question 4

What does 'limited liability' mean for a business owner?

Accepted Answer

The owner's personal assets are protected from business debts and lawsuits

Answer

The owner is personally responsible for all business debts

Answer

The business cannot take on any debt

Answer

Profits are limited by the government

Question 5

What is 'eminent domain' in U.S. law?

Accepted Answer

The government's right to take private property for public use with fair compensation

Answer

The government's power to collect taxes

Answer

A corporation's right to acquire smaller companies

Answer

The authority to regulate interstate commerce

Question 6

Which of the following is an example of 'insider trading'?

Accepted Answer

Trading stocks based on material, non-public information

Answer

Buying stock based on a company's public annual report

Answer

Selling shares after a public earnings announcement

Answer

Investing in an index fund