Test Bank For Managers And the Legal Environment Strategies for the 21st Century 7th Edition by Constance E. Bagley
Chapter 1
Law, Value Creation, and Risk Management
True False Questions
1. Private law provides the legal rules within which firms compete.
ANSWER: False
SKILL LEVEL: Analytic
OBJECTIVE: AIPCA: Legal
2. Managers can make their own “public” law.
ANSWER: False
SKILL LEVEL: Analytic
OBJECTIVE: AICPA: Legal
3. Insurance policies may help firms manage risk.
ANSWER: True
SKILL LEVEL: Analytic
OBJECTIVE: AICPA: Legal
4. Researchers have determined that Fortune 500 firms convicted of illegal conduct earned significantly lower returns on assets than firms that had not been convicted of wrongdoing.
ANSWER: True
SKILL LEVEL: Ethics
OBJECTIVE: AICPA: Legal
5. Lobbying legislators is one method by which managers can help shape the environment in which they do business.
ANSWER: True
SKILL LEVEL: Communication
OBJECTIVE: AICPA: Critical Thinking
6. Laws enacted in response to corporate misdeeds often impose fewer restrictions and costs on business than would have been imposed had firms as a whole acted more responsibly at the outset.
ANSWER: False
SKILL LEVEL: Analytic
OBJECTIVE: AICPA: Legal
7. Promoting economic growth is one of the primary public policy objectives of laws and regulations applicable to business.
ANSWER: True
SKILL LEVEL: Analytic
OBJECTIVE: AICPA: Critical Thinking
8. Worker protection is one major public policy concern underlying U.S. business law.
ANSWER: True
SKILL LEVEL: Ethics
OBJECTIVE: AICPA: Critical Thinking
9. Researchers found a statistically significant inverse relationship between a country’s economic prosperity, as measured by the per capita gross domestic product, and the country’s judicial independence.
ANSWER: False
SKILL LEVEL: Analytic
OBJECTIVE: AICPA: Critical Thinking
10. As used in the text, the term “legal astuteness” refers to the ability of a manager to avoid situations making consultation with legal counsel necessary.
ANSWER: False
SKILL LEVEL: Analytic
OBJECTIVE: AICPA: Legal
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