Question

QUESTION 11

1. Which of the following ethical theories explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business?

   		the Friedman doctrine
   		The naive immoralist
   		The righteous moralist
   		Cultural realtivism

QUESTION 12

1. Countries with ___________ economies in which property rights are protected tend to achieve greater economic growth rates than other economies where prosperity where property rights are poorly protected.

   		free market
   		mixed
   		market
   		command

QUESTION 14

1. Under the mudarabah banking system, when an Islamic bank lends money to a business:

   		it charges that business interest on the loan.
   		the business needs to pay back the loan with an additional markup.
   		it takes a share in the profits that are derived from the investment.
   		it has to donate the interest received on the loan to a charitable trust.

QUESTION 16

1. Business ethics that either deny the value of business ethics or apply the concept in a very unsatisfactory way are termed __________________.

   		Straw men
   		rights theories
   		the Sullivan principles
   		just distribution

QUESTION 17

1. Justice theories of business ethics focus on:

   		the moral worth of actions or practices.
   		the attainment of an equitable distribution of goods and services.
   		fundamental rights and privileges that transcend national boundaries.
   		minimum levels of morality acceptable behavior.

QUESTION 19

1. Which of the following observations is correct?

   		Protection of the right to private property is not embedded within Islam.
   		The economic principles of Islam prohibit the payment or receipt of interest.
   		The economic principles established in the Koran are against free enterprise.
   		The Koran speaks disapprovingly of earning legitimate profit through trade and commerce.

Answer 1

11) The Friedman doctrine explicitly rejects the idea that businesses should undertake social expenditures beyond those mandated by the law and required for the efficient running of a business. According to Friedman “an entity’s greatest responsibility lies in the satisfaction of the shareholders.” The primary goal should be to increase profitability and there by maximize shareholders' satisfaction. Business must undertake only social expenditures those mandated by the law and required for the efficient running of a business. The answer is option (a).