A fund promises high returns with little risk. In fact it pays earlier investors with money collected from new investors. What kind of fraud is this?Investor.gov (U.S. Securities and Exchange Commission), "Ponzi Scheme". DSST outline area I (7%), b. issues raised by business scandals, fraud and insider trading
According to the Justice Department's guidance on corporate compliance programs, what does an effective program require of company leadership?U.S. Department of Justice, Criminal Division, "Evaluation of Corporate Compliance Programs" (updated September 2024). DSST outline area I (7%), c. ethical leadership
According to the view called shareholder primacy, how should a firm be managed?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area I (7%), a. fundamentals of business ethics, the profit motive
An executive learns that her company will soon report a large loss. Before the news is public she sells her shares. What is this?Investor.gov (U.S. Securities and Exchange Commission), glossary: "Insider Trading". DSST outline area I (7%), b. issues raised by business scandals, fraud and insider trading
Show all 100 questions (96 more)
The importance of business ethics, continued
In a 1970 argument still cited in business ethics, the economist Milton Friedman objected to corporate social responsibility. What did he say managers should do instead?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area I (7%), a. fundamentals of business ethics, the profit motive
The Justice Department's compliance guidance names one "hallmark of a well-designed compliance program" for hearing about misconduct. What is it?U.S. Department of Justice, Criminal Division, "Evaluation of Corporate Compliance Programs" (updated September 2024). DSST outline area I (7%), c. ethical leadership
Which 2002 federal law set out to combat corporate and accounting fraud and created a board to oversee the auditing profession?Investor.gov (U.S. Securities and Exchange Commission), "The Laws That Govern the Securities Industry". DSST outline area I (7%), b. issues raised by business scandals, fraud and insider trading
Moral philosophies and business ethics 9
A firm lies to customers to raise sales. Which principle of Kant's condemns this because it treats people "merely as a means"?Internet Encyclopedia of Philosophy, "Immanuel Kant". DSST outline area II (9%), b. philosophies: Kantian ethics
A manager chooses among three plant sites by asking only which one creates the greatest net benefit for everyone affected. Which moral theory is she using?Internet Encyclopedia of Philosophy, "Act and Rule Utilitarianism". DSST outline area II (9%), b. philosophies: utilitarianism
A manager says that moral judgments are true only for a given culture and that no culture's standpoint is better than another's. Which view is this?Internet Encyclopedia of Philosophy, "Moral Relativism". DSST outline area II (9%), b. philosophies: relativism
A salesman keeps the rules only when breaking them would cost him his bonus, and uses co-workers to get what he wants. Which of Kohlberg's levels does this reasoning fit?Internet Encyclopedia of Philosophy, "Moral Development". DSST outline area II (9%), a. moral development
Care ethics arose in the 1980s as an alternative to the "justice perspective". Which psychologist's work is it most often traced to, along with the philosopher Nel Noddings?Internet Encyclopedia of Philosophy, "Care Ethics". DSST outline area II (9%), a. moral development
In Kohlberg's account of moral development, which level is marked by conforming to what one's peers and society do?Internet Encyclopedia of Philosophy, "Moral Development". DSST outline area II (9%), a. moral development
John Rawls's Difference Principle allows social and economic inequalities on one condition. What is it?Internet Encyclopedia of Philosophy, "John Rawls". DSST outline area II (9%), b. philosophies: justice
What separates psychological egoism from ethical egoism?Internet Encyclopedia of Philosophy, "Egoism". DSST outline area II (9%), b. philosophies: egoism
Which approach asks how a person of good character would act, rather than which duty applies or which result is best?Internet Encyclopedia of Philosophy, "Virtue Ethics". DSST outline area II (9%), b. philosophies: virtue ethics
Corporations and stakeholders 13
A board makes a careful, good-faith decision to open a new plant, and the plant loses money. Which rule protects the directors from liability to the corporation?Cornell Law School, Legal Information Institute, Wex: "business judgment rule". DSST outline area III (13%), a. relationship with stockholders
A delivery driver, while on his route, carelessly injures a pedestrian. Under which doctrine can the employer be held legally responsible?Cornell Law School, Legal Information Institute, Wex: "respondeat superior". DSST outline area III (13%), b. relationship with employees
A director steers a company contract to a supplier she secretly owns. Which fiduciary duty has she breached?Cornell Law School, Legal Information Institute, Wex: "duty of loyalty". DSST outline area III (13%), a. relationship with stockholders
A mower is built exactly to plan, but the plan itself leaves the blade unguarded when a safer plan existed. Which kind of product defect is this?Cornell Law School, Legal Information Institute, Wex: "product liability". DSST outline area III (13%), c. corporations and consumers
Business ethicists debate "corporate moral agency". What is the question?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area III (13%), d. the corporation within the community and the public good
President Kennedy's 1962 message to Congress on protecting the consumer named four consumer rights. Which of these is one of them?The American Presidency Project (University of California, Santa Barbara), John F. Kennedy, "Special Message to the Congress on Protecting the Consumer Interest," March 15, 1962. DSST outline area III (13%), c. corporations and consumers
Product liability usually goes with strict liability. What does strict liability mean for a manufacturer?Cornell Law School, Legal Information Institute, Wex: "product liability". DSST outline area III (13%), c. corporations and consumers
Under the Sarbanes-Oxley Act, who must certify a public company's annual and quarterly reports to the SEC?Cornell Law School, Legal Information Institute, Wex: "Sarbanes-Oxley Act". DSST outline area III (13%), a. relationship with stockholders
What do workers' compensation laws give an employee who is injured on the job?Cornell Law School, Legal Information Institute, Wex: "workers' compensation". DSST outline area III (13%), b. relationship with employees
What does stakeholder theory tell managers to do?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area III (13%), a. relationship with stockholders
Which common law doctrine puts the burden on the buyer to examine property before a purchase?Cornell Law School, Legal Information Institute, Wex: "caveat emptor". DSST outline area III (13%), c. corporations and consumers
Which federal law regulates air emissions from stationary and mobile sources and lets the EPA set national air quality standards?U.S. Environmental Protection Agency, "Summary of the Clean Air Act". DSST outline area III (13%), d. the corporation within the community and the public good
Who selects the board of directors of a corporation?Cornell Law School, Legal Information Institute, Wex: "board of directors". DSST outline area III (13%), a. relationship with stockholders
Social responsibilities of a business 10
A bookkeeper who is trusted with a client's funds moves part of them into his own account. What is this called?Cornell Law School, Legal Information Institute, Wex: "embezzlement". DSST outline area IV (10%), b. individual responsibilities within a business
A director has a personal financial interest in a deal that the board is about to vote on. What does the duty of loyalty call for?Cornell Law School, Legal Information Institute, Wex: "duty of loyalty". DSST outline area IV (10%), b. individual responsibilities within a business
How did the United Nations Brundtland Commission define sustainability in 1987?United Nations Academic Impact, "Sustainability". DSST outline area IV (10%), d. sustainable business growth and environmental responsibility
How is corporate social responsibility (CSR) typically understood?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area IV (10%), a. moral and ethical stances
In the UN "protect, respect and remedy" framework for business and human rights, which duty falls to firms?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area IV (10%), c. global responsibilities of a business
The Ten Principles of the UN Global Compact set out fundamental responsibilities for companies in four areas. Which list is right?United Nations Global Compact, "The Ten Principles of the UN Global Compact". DSST outline area IV (10%), c. global responsibilities of a business
Through her job, an executive hears of a site that her company wants for a new store, and she buys it for herself. Which doctrine does this break?Cornell Law School, Legal Information Institute, Wex: "corporate opportunity". DSST outline area IV (10%), b. individual responsibilities within a business
What is the conventional wisdom on the link between a firm's social performance and its financial performance?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area IV (10%), a. moral and ethical stances
Which federal law controls how solid and hazardous waste is disposed of?Cornell Law School, Legal Information Institute, Wex: "environmental law". DSST outline area IV (10%), d. sustainable business growth and environmental responsibility
Which of these is one of the fundamental rights at work named in the International Labour Organization's 1998 Declaration?International Labour Organization, "ILO Declaration on Fundamental Principles and Rights at Work". DSST outline area IV (10%), c. global responsibilities of a business
Regulation of business 9
A company runs ads urging the public to call their senators about a pending bill. What kind of lobbying is this?Cornell Law School, Legal Information Institute, Wex: "lobbying". DSST outline area V (9%), b. business and politics
A trade group lobbies for a tariff on its foreign competitors. Critics call this "rent-seeking". What does the term mean?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area V (9%), a. theoretical issues
May a federal candidate's campaign accept a contribution from the general treasury funds of a corporation?Federal Election Commission, "Who can and can't contribute". DSST outline area V (9%), b. business and politics: political contributions
Two rival airlines secretly agree to charge the same fares. Under which federal law is this price fixing most often illegal?Cornell Law School, Legal Information Institute, Wex: "price-fixing". DSST outline area V (9%), c. governmental control over business activities
What does federal election law call the political committee that a corporation or a labor union sponsors, more commonly known as a PAC?Federal Election Commission, "Understanding the SSF and its connected organization". DSST outline area V (9%), b. business and politics: political contributions
What is an administrative agency?Cornell Law School, Legal Information Institute, Wex: "administrative agency". DSST outline area V (9%), a. theoretical issues
What must be shown to prove that a payment to a public official was a bribe?Cornell Law School, Legal Information Institute, Wex: "bribery". DSST outline area V (9%), b. business and politics: conflicts of interest
Which law created the Securities and Exchange Commission and gave it broad authority over the securities industry?Investor.gov (U.S. Securities and Exchange Commission), "The Laws That Govern the Securities Industry". DSST outline area V (9%), c. governmental control over business activities
Which of the three key federal antitrust statutes regulates mergers and acquisitions?Cornell Law School, Legal Information Institute, Wex: "antitrust". DSST outline area V (9%), c. governmental control over business activities
Employer-employee relations 20
A hiring rule looks neutral but screens out far more applicants of one protected group, with no intent to do so. What is this called?Cornell Law School, Legal Information Institute, Wex: "disparate impact". DSST outline area VI (20%), b. discrimination and affirmative action
A supervisor denies an employee a promotion because she refused his sexual demands. Which type of sexual harassment is this?Cornell Law School, Legal Information Institute, Wex: "quid pro quo". DSST outline area VI (20%), c. sexual harassment
According to the EEOC, when does harassment because of sex become illegal, apart from causing an adverse employment decision?U.S. Equal Employment Opportunity Commission, "Sexual Harassment". DSST outline area VI (20%), c. sexual harassment
According to the EEOC, who can be the harasser in a sexual harassment case?U.S. Equal Employment Opportunity Commission, "Sexual Harassment". DSST outline area VI (20%), c. sexual harassment
An employee sues her employer, on the government's behalf, for overbilling a federal agency. What is this kind of False Claims Act suit called?Cornell Law School, Legal Information Institute, Wex: "qui tam action". DSST outline area VI (20%), a. confidentiality and whistle-blowing
An employer may sometimes defend a hiring rule as a bona fide occupational qualification (BFOQ). For which characteristics can a BFOQ never be claimed?Cornell Law School, Legal Information Institute, Wex: "bona fide occupational qualification (BFOQ)". DSST outline area VI (20%), b. discrimination and affirmative action
As Cornell's Wex legal encyclopedia defines it, what is affirmative action designed to do?Cornell Law School, Legal Information Institute, Wex: "affirmative action". DSST outline area VI (20%), b. discrimination and affirmative action
How many employees must an employer have to be covered by Title VII of the Civil Rights Act of 1964?U.S. Equal Employment Opportunity Commission, "Title VII of the Civil Rights Act of 1964". DSST outline area VI (20%), b. discrimination and affirmative action
In a closed shop, a person must already belong to a specific union to be hired. What did the Taft-Hartley Act of 1947 do about closed shops?Cornell Law School, Legal Information Institute, Wex: "closed shop". DSST outline area VI (20%), e. labor relations: unions
On one prominent account in business ethics, DeGeorge's, when may an employee blow the whistle?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VI (20%), a. confidentiality and whistle-blowing
Title VII of the Civil Rights Act of 1964 bars employment discrimination on five grounds. Which list is right?U.S. Equal Employment Opportunity Commission, "Title VII of the Civil Rights Act of 1964". DSST outline area VI (20%), b. discrimination and affirmative action
What do state "right-to-work" laws do?Cornell Law School, Legal Information Institute, Wex: "union shop". DSST outline area VI (20%), e. labor relations: unions
What does a non-disclosure agreement (NDA) do?Cornell Law School, Legal Information Institute, Wex: "non-disclosure agreement (NDA)". DSST outline area VI (20%), a. confidentiality and whistle-blowing
What does Section 922 of the Dodd-Frank Act require the SEC to do for certain whistleblowers?Cornell Law School, Legal Information Institute, Wex: "Dodd-Frank: Title IX". DSST outline area VI (20%), a. confidentiality and whistle-blowing
What does the employment-at-will doctrine provide?Cornell Law School, Legal Information Institute, Wex: "employment-at-will doctrine". DSST outline area VI (20%), e. labor relations: at-will employment
What does the General Duty Clause of the Occupational Safety and Health Act require of each employer?Occupational Safety and Health Administration, OSH Act of 1970, Section 5, "Duties". DSST outline area VI (20%), d. duties of corporate officers: workplace safety
Which federal law, also called the Wagner Act, explicitly grants employees the right to bargain collectively and to join trade unions?Cornell Law School, Legal Information Institute, Wex: "collective bargaining". DSST outline area VI (20%), e. labor relations: unions
Which fiduciary duty requires directors and officers to make decisions with reasonable diligence and prudence?Cornell Law School, Legal Information Institute, Wex: "duty of care". DSST outline area VI (20%), d. duties of corporate officers
Who is a whistleblower?Cornell Law School, Legal Information Institute, Wex: "whistleblower". DSST outline area VI (20%), a. confidentiality and whistle-blowing
Whom does the Age Discrimination in Employment Act (ADEA) protect?U.S. Equal Employment Opportunity Commission, "Age Discrimination". DSST outline area VI (20%), b. discrimination and affirmative action
Ethics of information 16
A coffee shop's sign says it serves "the best coffee in the world". Why is such a claim not treated as deceptive advertising?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VII (16%), a. marketing and advertising
A consultant's contract bars her from joining a rival firm for one year after she leaves. What is this clause called?Cornell Law School, Legal Information Institute, Wex: "covenant not to compete". DSST outline area VII (16%), d. control of proprietary information
A store advertises a television at a very low price that it does not intend to sell, then steers shoppers to a costlier model. What is this practice called?Cornell Law School, Legal Information Institute, Wex: "bait and switch". DSST outline area VII (16%), a. marketing and advertising
An email that seems to come from a bank asks an employee to "confirm" an account number on a fake web page. What is this technique called?National Institute of Standards and Technology, Computer Security Resource Center glossary: "phishing". DSST outline area VII (16%), b. corporate espionage and cybersecurity
An engineer steals a rival firm's trade secrets for his own employer's commercial gain, with no foreign government involved. What is this theft often called?Cornell Law School, Legal Information Institute, Wex: "economic espionage". DSST outline area VII (16%), b. corporate espionage and cybersecurity
Article 17 of the EU General Data Protection Regulation gives people a "right to be forgotten". What is its formal name?General Data Protection Regulation, Article 17, "Right to erasure ('right to be forgotten')" (text at gdpr-info.eu). DSST outline area VII (16%), e. information technology regulations
How does the European Commission define personal data under EU data protection law?European Commission, "Data protection explained". DSST outline area VII (16%), c. privacy issues and concerns
How does the federal Computer Fraud and Abuse Act define computer fraud?Cornell Law School, Legal Information Institute, Wex: "computer and internet fraud". DSST outline area VII (16%), b. corporate espionage and cybersecurity
How does trade secret protection differ from a patent?Cornell Law School, Legal Information Institute, Wex: "trade secret". DSST outline area VII (16%), d. control of proprietary information
In business ethics, what makes an advertisement deceptive?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VII (16%), a. marketing and advertising
Section 802 of the Sarbanes-Oxley Act made which act a federal crime?Cornell Law School, Legal Information Institute, Wex: "Sarbanes-Oxley Act". DSST outline area VII (16%), e. information technology regulations
Under the Fair Credit Reporting Act, what must an employer generally have before a consumer reporting agency may give it a report on a job applicant?Cornell Law School, Legal Information Institute, Wex: "Fair Credit Reporting Act (FCRA)". DSST outline area VII (16%), c. privacy issues and concerns
What does a patent give its holder?Cornell Law School, Legal Information Institute, Wex: "patent". DSST outline area VII (16%), d. control of proprietary information
What does the Federal Trade Commission Act prohibit?Cornell Law School, Legal Information Institute, Wex: "consumer protection laws". DSST outline area VII (16%), a. marketing and advertising
What is the highest administrative fine the EU General Data Protection Regulation allows for the most serious infringements by a company?General Data Protection Regulation, Article 83, "General conditions for imposing administrative fines" (text at gdpr-info.eu). DSST outline area VII (16%), e. information technology regulations
Which of these rights does the California Consumer Privacy Act give consumers?State of California Department of Justice, Office of the Attorney General, "California Consumer Privacy Act (CCPA)". DSST outline area VII (16%), c. privacy issues and concerns
Business ethics in a global economy 16
A company exports a product for less than it normally charges in its own home market. What is this called?World Trade Organization, "Understanding the WTO: Anti-dumping, subsidies, safeguards". DSST outline area VIII (16%), e. fair trade laws and standards (WTO)
A drug maker develops a medicine for a disease of the very poor, knowing it will earn nothing, and gives it away for decades. In business ethics this is a well-known example of what?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), a. corporate citizenship
A manager finds a host country's practices morally intolerable, and her firm sells its operations there. What are two common reasons given for such divestment?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), b. ethics in transnational corporations
A shoe company designs its shoes and pays firms abroad to make them. For what are such companies often held responsible?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), c. outsourcing and off-shoring
A WTO member lowers its customs duty on steel from one trading partner. What does the most-favoured-nation principle then require?World Trade Organization, "Understanding the WTO: Principles of the trading system". DSST outline area VIII (16%), e. fair trade laws and standards (WTO)
According to the UN Global Compact, where should a responsible business apply its values and principles?United Nations Global Compact, "The Ten Principles of the UN Global Compact". DSST outline area VIII (16%), a. corporate citizenship
Besides banning bribes, the Foreign Corrupt Practices Act has accounting provisions for companies whose securities are listed in the United States. What do they require?U.S. Department of Justice, Criminal Division, "Foreign Corrupt Practices Act: An Overview". DSST outline area VIII (16%), b. ethics in transnational corporations
Critics of low-wage "sweatshop" factories grant that workers choose the jobs. What do they deny?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), c. outsourcing and off-shoring
In Donaldson and Dunfee's theory, what are "hypernorms"?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), d. ethical standards in different countries
Some writers defend low-wage factories in developing countries. What do they say about the wages paid there?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), c. outsourcing and off-shoring
What did Congress enact the Foreign Corrupt Practices Act of 1977 to make unlawful?U.S. Department of Justice, Criminal Division, "Foreign Corrupt Practices Act: An Overview". DSST outline area VIII (16%), b. ethics in transnational corporations
What do business ethicists call firms that operate across national boundaries?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), b. ethics in transnational corporations
What does the WTO principle of national treatment require?World Trade Organization, "Understanding the WTO: Principles of the trading system". DSST outline area VIII (16%), e. fair trade laws and standards (WTO)
What is the name of Donaldson and Dunfee's approach to choosing between home-country and host-country standards?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), d. ethical standards in different countries
Which agreement took the place of the North American Free Trade Agreement (NAFTA) on July 1, 2020?Office of the United States Trade Representative, "United States-Mexico-Canada Agreement". DSST outline area VIII (16%), e. fair trade laws and standards (NAFTA)
Within the limits set by hypernorms, Donaldson and Dunfee say that firms have "free space" to select moral standards. What must guide that choice?Stanford Encyclopedia of Philosophy, "Business Ethics". DSST outline area VIII (16%), d. ethical standards in different countries
How this list was compiled: Our own questions, written to the content outline of the DSST Business Ethics and Society fact sheet (Prometric, revised 11/2021, https://getcollegecredit.com/wp-content/uploads/2022/09/BusinessEthicsAndSociety.pdf, read 2026-10-08): the importance of business ethics 7%, moral philosophies and business ethics 9%, corporations and stakeholders 13%, social responsibilities of a business 10%, regulation of business 9%, employer-employee relations 20%, ethics of information 16%, business ethics in a global economy 16%. The bank holds 7, 9, 13, 10, 9, 20, 16 and 16 questions: the same shares of 100. Each fact was read on 2026-10-08 in the public page named under its question: the Stanford Encyclopedia of Philosophy, the Internet Encyclopedia of Philosophy, Cornell Law School's Wex, and pages of the EEOC, OSHA, the SEC's Investor.gov, the Department of Justice, the FEC, the EPA, NIST, the USTR, the WTO, the ILO, the United Nations, the European Commission and the California Attorney General. Licence: Questions, choices and explanations are original work of this site.
How it works
This DSST Business Ethics and Society practice test holds 100 questions written for this site and weighted like the exam's own outline. It is unofficial: Prometric, which owns the DSST program, is not affiliated with it and has not endorsed it.
Read the full guide
The eight areas
By Prometric's fact sheet (revised 11/2021, read October 8, 2026), employer-employee relations is the largest area at 20%. Ethics of information and business ethics in a global economy follow at 16% each, corporations and stakeholders at 13%, social responsibilities at 10%, moral philosophies and regulation of business at 9% each, and the importance of business ethics at 7%.
Sources
Law questions were read at the agency's own page (the EEOC, OSHA, the Justice Department) or in Cornell Law School's Wex. Philosophy questions were read in the Stanford and Internet encyclopedias of philosophy.
Employment law is a fifth of the exam: Title VII's five grounds, the age-40 line, quid pro quo against hostile environment.
Pair each philosophy with the question it asks: results (utilitarian), duty (Kant), character (virtue), self-interest (egoist).
Questions and answers
Is there a DSST Business Ethics and Society study guide?
Start with the free fact sheet: the outline, its percentages and three reference textbooks. The DSST site also has an Exam Focus article on this title.
Is this business ethics DSST practice test current on the law?
Each fact was read at its source on October 8, 2026, and changes are noted: one answer records that Executive Order 11246 on affirmative action was revoked in January 2025. Laws change, so open the link under an answer.
How long is the DSST Business Ethics and Society exam?
The fact sheet gives 100 questions to answer in 2 hours, and exam mode here keeps both numbers. The American Council on Education recommends 3 semester hours of lower-level credit for a score of 400.
Does the page use real DSST questions?
No. All 100 were written for this page from the outline and from public sources, and none is taken or reworded from the exam, its sample questions or a prep provider. A result here says nothing certain about the real exam.