Book Notes - Chapters 1, 17, 2, 5, 3 Flashcards
Transfer Payments
Payments made by the federal gov’t to provinces and territories to deliver req’d services (education, health) and to equalize wealth across Canada
Three Levels of Gov’t
Federal
Provincial/Territorial
Municipal
Patent
Form of protection by the gov’t for inventions: right to manufacture, use and sell for 20yrs
Copyright
Form of protection by the gov’t for: art, music, literature & other intellectual property. Protects for the lifetime of the creator + 50 years thereafter.
Trademark
Legally exclusive design, name or other distinctive mark that is used to identify products
Bankruptcy
Legal procedure by which individuals/businesses fail to meet financial obligations are re-leaved of some, if not all debt.
Deregulation
The removal of rules and regulations governing business competition
Tort
A civil or private act that harms other people or their property (Physical injury, emotional distress, invasion of privacy or defamation)
Consumerism
A movement that seeks to increase the rights and powers of buyers in relation to sellers
Express Warranties
Specific statements of fact, promises about a product by a seller
Implied Warranties
Not written or oral: example, individual purchases vehicle and next day transmission falls out. This would be covered under Implied Warranties.
Product Liability
Responsibility of manufacturers and sellers for defects in the products they make/sell
Strict Liability
Concept in product liability laws under which manufacturer/seller is liable for personal injury or property damage caused by defective products that did not meet industry standards
Cartel
Agreement between enterprises to lessen competition
Monopoly
No competition - benefits of a free market are lost
Income Taxes
Taxes based on the income received by businesses and individuals
Property Taxes
Taxes imposed on personal property based on assessed value
Payroll Taxes
Income taxes collected by the employer and remitted to the government. Usually a form of deduction from the employees pay
Sales Tax
Taxes levied on goods and services when they are sold - calc as % of price
Excise Tax
Taxes that are imposed on specific items, such as: Gas, Tobacco and Alcohol
Economics
Study of how a society uses scarce resources to produce and distribute goods and services
Microeconomics
The sub area of Economics that focuses on an individual parts of the economy such as households or businesses
Macroeconomics
The sub area of Economics that focuses on the economy as a whole by looking at aggregate data for large groups of people companies or products
Factors of production
Resources used to create goods and services including natural resources labor Capital entrepreneurship and knowledge
Labor
Economic contributions of people
Capital
The input such as tools, Machinery, equipment, and buildings, used produce goods and services to the customer
Entrepreneurs
People who combine the inputs of Natural Resources, labor, and capital to produce goods or services with the intention of making a profit or accomplish a thing a non-for-profit goal
Entrepreneurial thinking
Thinking like an entrepreneur even by those who work in a company
Knowledge
The combined talents and skills of the workforce
Circular flow
The movement of inputs and outputs among households, businesses, and governments; a way of showing how the sectors of the economy interact
Economic system
The combination of policies, laws, and choices made by a nation’s government to establish the systems that determine what goods and services are produced and how they are allocated
Market economy
An economic system based on the competition in the marketplace and private ownership of the factors of production, resources, also known as the private enterprise system or capitalism
Command economy
An economic system characterized by government ownership of virtually all resources and economic decision making by central government planning, also known as planned economy and Central planning
Socialism
A social and economic system in which the basic Industries are owned either by the government or by the private sector under strong government control
Mixed economies
Economies that combine several economic systems, for example, and economy in which the government owns certain industries but the private sector owns others
Market structure
The number of suppliers in a market
Perfect (pure) competition
A market structure in which a large number of small businesses sell similar products, buyers and sellers have good information, and businesses can be easily open or closed
Monopolistic competition
A market structure in which many businesses offer products that are close substitutes and in which entry is relatively easy
Oligopoly
A market structure in which a few companies produce most or all of the output, and in which large Capital requirements or other factors limit the number of companies
Pure Monopoly
A market structure in which a single Company accounts for all industry sales and in which there are barriers to entry
Barriers to entry
Factors, such as technological or legal conditions, which prevent new companies from competing equally with a monopoly
Demand
The quantity of a good or service that people are willing to buy at various prices
Demand curve
A graph showing the quantity of a good or service that people are willing to buy at various prices
Supply
The quantity of a good or service that businesses will make available at various prices
Supply curve
A graph showing the quantity of a good or service that a business will make available at various prices
Equilibrium
The point at which quantity demanded equals quantity supplied
Economic growth
An increase in a nation’s output of goods and services
Gross domestic product, GDP
The total market value of all final goods and services produced by a country regardless of where the factors of production are located
Business Cycles
How are changes in the level of economic activity
Recession
A decline in GDP that last for at least two consecutive quarters
Full employment
The condition when all people who want to work and can work have jobs
Unemployment rate
The percentage of the total labor force that is actively looking for work but is not actually working
Frictional unemployment
Short term unemployment that is not related to the business cycle
Structural unemployment
Unemployment that is caused by a mismatch between available jobs and the skill of available workers in an industry or region, not related to the business cycle
Cyclical unemployment
Unemployment that occurs when a downturn in the business cycle reduces the demand for labor throughout the economy
Seasonal unemployment
Unemployment that occurs during specific seasons in certain industries
Inflation
The situation in which the average of all prices of goods and services is rising
Purchasing power
The value of what money can buy
Demand-pull inflation
Inflation that occurs when the demand for goods and services is greater than the supply
Cost-push inflation
Inflation that occurs when increases in production costs push up the prices of final goods and services
Consumer Price Index CPI
An index of the prices of a shopping basket of goods and services purchased by consumers
Producer price index PPI
An index of the prices paid by producers and wholesalers for various Commodities, such as raw materials, partially finished goods, and finished products
Bank of Canada
Canada Central Bank, whose objective is the economic and financial well-being of Canada by creating a sound balance of growth, employment, and price stability
Monetary policy
The measures taken by the Bank of Canada to regulate the amount of money in circulation to influence the economy
Contractionary policy
The use of monetary policy by the Bank of Canada to tighten the money supply by selling government securities or raising interest rates
Expansionary policy
The use of monetary policy by the Bank of Canada to increase the growth of the money supply
Fiscal policy
The government’s use of Taxation and spending to affect the economy
Federal budget deficit
The condition that occurs when the federal government spends more for programs than it collects in taxes
National debt
The accumulated total of all the federal government’s annual budget deficits
Crowding out
The situation that occurs when government spending replaces spending by the private sector
Bonds
Securities that represent long-term debt obligations liabilities issued by corporations and governments
Relationship management
The practice of building, maintaining, and enhancing interactions with customers and other parties to develop long-term satisfaction through mutually beneficial Partnerships
Strategic Alliance
A Cooperative agreement between companies, sometimes called a strategic partnership
Ethics
A set of moral standards for judging whether something is right or wrong
Component lifestyle
A lifestyle made up of a complex set of Interest, needs and choices
Demography
The study of people’s Vital Statistics, such as their age, gender, race and ethnicity, and location
Generation Z
Canadians born from the late 1990s onward
Generation Y
Canadians born between 1977 and 1997
Generation X
Canadians born between 1964 and 1977
Baby boomers
Canadians born between 1946 and 1964
Multiculturalism
The fundamental belief that all citizens are equal regardless of their racial or ethnic background
Social responsibility
The concern of businesses for the welfare of society as a whole, consists of obligations Beyond those required by law or contracts
Neoliberalism
A set of economic policies that believes that the economy ( and therefore social policy) should be market-driven not government driven
Stakeholders
Individuals, groups, or organizations to whom a business has a responsibility, employees, customers, suppliers, investors, and the General Public
Social investing
The practice of limiting Investments to Securities of companies that act in accordance with the investors beliefs about ethical and social responsibility
Corporate philanthropy
The practice of charitable giving by corporations, includes contributing cash, donating equipment and products, and supporting the volunteer efforts of company employees
Corporate governance
The way in which an organization is governed, directed, and administered
Utilitarianism
A philosophy that focuses on the consequences of an action to determine whether it is right or wrong and holds that an action that affects the majority adversely is morally wrong
Canadian Charter of Rights and Freedoms
Legislation that guarantees the rights and freedoms of Canadians
Justice
What is considered Fair according to the prevailing standards of society, in the 21st century, and equitable distribution of the burdens and rewards that Society has to offer
Preconventional ethics
A stage in the ethical development of individuals in which people behave in a childlike Manner and make ethical decisions in a calculating, self-centered, selfish way, based on the possibility of immediate punishment or reward, also known as self-centered ethics
Conventional ethics
The second stage in the ethical development of individuals in which people move from an egocentric Viewpoint to consider the expressions of an organization or Society, also known as social ethics
Post conventional ethics
The third stage in the ethical development of individuals in which people adhere to the ethical standards of amateur addled and are less concerned about how others view their behavior then about how they will judge themselves in the long run, also known as principled ethics
Code of ethics
A set of guidelines prepared by a company to provide its employees with the knowledge of what the company expects in terms of their responsibilities and behavior toward fellow employees, customers and suppliers
Whistleblower
An employee, a former employee, or any other member of an organization who reports misconduct by others in the organization to those who have the power to take corrective action
Strategic giving
The practice of tying philanthropy closely to the corporate Mission or goals and targeting donations to Regions where a company operates
Money
Anything that is acceptable as payment for goods and services
Currency
Bank notes and coins used as a medium of Exchange
Demand deposits
Money kept in checking accounts that can be withdrawn by depositors on demand
Time deposits
Money invested for a specific time
Term deposits
Deposits at a bank or other financial institution that pay interest but cannot be withdrawn on demand
Open market operations
The purchase or sale of Canadian government securities by the Bank of Canada to stimulate or slow down the economy
Bank rate
The interest rate that the Bank of Canada charges on one day loans to financial institutions
Target for the overnight rate
The signal to the major participants in the money market as to what the Bank of Canada is aiming for when participants borrow and lend one-day funds to each other
Four pillars of the Canadian Financial system
The country’s Banks, trust companies, insurance companies, and investment dealers
Financial intermediation
Process in which financial institutions act as intermediaries between the suppliers and demanders of funds
Chartered Banks
Profit oriented financial institutions that accept deposits, make business and Consumer loans, invest in government and corporate Securities, and provide other Financial Services
Trust Company
A financial institution that conducts the same activities as a bank but can also administer Estates, trust, pension plans, and agency contracts
Credit unions and caisses populaires
Not-for-profit, member-owned Financial corporatives
Pension funds
Large pools of money set aside by corporations, unions, and government for later use in payment retirement benefits to their employees or members
Canada Deposit Insurance Corporation cdic
A federal Crown Corporation created in 1967 to provide Deposit Insurance and contribute to the stability of Canada’s Financial system
Securities
Investment certificates issued by corporations or governments that represent either Equity or debt
Common shares
The most widely form of ownership with the right of owner (shareholder) to vote on important corporate decisions
Dividends
Prophets of the company that are distributed to the shareholders
Preferred shares
Shares that unlike common shares, have a specified fixed dividend but typically not a voice in management
Bonds
Securities that represent a long-term debt obligations, liabilities issued by corporations or governments
Interest
A fixed amount of money paid by the issuer of a bond to the bondholder on a regular schedule, typically every 6 months, stated as the coupon rate
Principal
The amount Borrowed by the issuer of a bond, also called per value
High-yield, junk bonds
High risk, High return bonds
Secured bonds
Corporate bonds for which specific assets have been pledged as collateral
Mortgage bonds
Corporate bonds that are secured by property, such as land, equipment, or buildings
Debentures
Unsecured bonds that are backed only by the reputation of the issuer and its promise to pay the principal and interest when due
Convertible bonds
Corporate bonds that are issued with an option that allows the bondholder to convert them into common shares
Bond ratings
Letter grades assigned to bond issues to indicate their quality or level of risk, assigned by rating agencies such as Moody’s and Standard and Poor’s (S&P)
Mutual fund
Financial Service Company that pulls its investors funds to buy a selection of Securities that meet its stated investment goals
Exchange traded fund ETF
A basket of marketable Securities in a category, such as an industry sector, and investment objective, or a geographical area, or that track an index, similar to mutual funds but trade like shares
Futures contracts
Legally binding obligations to buy or sell specified quantities of Commodities or financial instruments at an agreed on price at a future date
Options
Contracts that title holders to buy or sell specified quantities of common shares or other financial instruments on a set price during a specified time
Institutional investors
Investment confessionals where paid to manage other people’s money
Investment bankers
Companies that act as intermediaries, buying Securities from corporations and governments and reselling them to the public
Underwriting
The process of buying Securities from corporations and governments and reselling them to the public, with the aim of reselling at a higher price, the main activity of investment bankers
Stock broker
A person whose license to buy and sell Securities on behalf of clients
Primary Market
The Securities Market where new Securities are sold to the public, usually with the help of investment bankers
Secondary Market
The Securities Market were sold, already issued, Securities are bought and sold, or traded, amongst investors
Broker markets or organized stock exchanges
Organizations on whose premises Securities are resold by using an auction-style trading system
Dealer markets
Securities markets were buy and sell orders are executed through dealers are market makers linked by telecommunications Networks
National Association of Securities dealers automated quotation NASDAQ system
The first electronic base stock market and the fastest-growing part of the stock market
Over the counter OTC market
A sophisticated telecommunications Network that links dealers and enables them to trade securities
Bull markets
Markets in which securities prices are rising
Bear markets
Markets in which security prices are falling
Global vision
The ability to recognize and react to international business opportunities, be aware of threats foreign competition, and effectively use international distribution networks to obtain raw materials and move finished products to customers
Multinational corporations
Corporations that move resources, Goods, services, and skills across National boundaries without regard to the country in which their headquarters are located
Exports
Goods and services produced in one country and sold in other countries
Imports
Goods and services bought from other countries
Balance of trade
The difference between the value of a country’s exports in the value of its Imports during a certain time
Trade Surplus
A favorable balance of trade that occurs when a country exports more than it Imports
Trade deficit
An unfavorable balance of trade that occurs when a country Imports more than it exports
Balance of payments
Summary of a country’s International financial transaction showing the difference between a country’s total payments to and total receipts from other countries
Floating exchange rates
A system in which prices of currencies move up and down based on a demand for and supply of the various currencies
Devaluation
A lowering of the value of a nation’s currency relative to other countries
Absolute advantage
The situation when a country can produce and sell a product at a lower cost than any other country or when it is the only country that can provide the product
Principle of comparative advantage
The concept that each country should specialize in the products that it can produce most readily and cheaply and trade those products for those that the other countries can produce more readily and cheaply
Free trade
The policy of Permitting the people of a country to buy and sell where they please without restrictions
Protectionism
The policy of protecting home industries from outside competition by establishing artificial barriers such as tariffs and quotas
Preferential tariffs
Tariff that is lower for some Nations than for others
Free trade zone
An area where the Nations allow free, or almost free, trade with each other while imposing tariffs on Goods of Nations outside the zone
North American Free Trade Agreement, NAFTA
A 1994 agreement creating a free trade zone that includes Canada, Mexico, and the United States
Mercosur
Trade agreement between Argentina, Brazil, Paraguay, Uruguay, and Venezuela
European Union, EU
Trade agreement among 28 European nations
Association of Southeast Asian Nations, ASEAN
A trading Bloc that includes 10 member states: Indonesia, Malaysia, Philippines, Singapore, Thailand, Brunei Darussalam, Vietnam, Laos, Mayanmar, and Cambodia
Exporting
The practice of selling domestically produced Goods to buyers in another country
Licensing
The legal process whereby a company agrees to allow another company to use a manufacturing process, trademark, patent, trade secret, or other proprietary knowledge in exchange for the payment of a royalty
Contract Manufacturing
The practice in which a foreign company manufactures private-label Goods under domestic company’s brand name
Joint venture
A business agreement in which two or more businesses agree to pool their resources for a specific project or business venture
Direct foreign investment
Active ownership of a foreign company or of manufacturing or marketing facilities in a foreign country
Countertrade
A form of international trade in which part or all of the payment for goods or services is in the form of other goods and services
Dumping
The practice of charging a lower price for a product in foreign markets than in the company’s home market
World Trade Organization, WTO
An organization established by the Uruguay round in 1994 to oversee International Trade, reduce trade barriers, and resolve disputes among member nations
World Bank
International Bank that offers low interest loans, as well as advice and information, to developing nations
International monetary fund, IMF
An international organization, founded in 1945, that promotes trade, make sure term loans to member nations, and acts as a lender-of-last-resort for troubled Nations
Nationalism
Sense of national consequence that boost the culture and interests of one country over those of all other countries
Infrastructure
The basic institutions and public facilities on which and economies development depends
Tariff
A tax imposed on imported goods
Protective tariffs
Tariffs are imposed to make Imports less attractive to buyers than domestic products
Import quota
A limit on the quantity of a certain good that can be imported, also known as quantitative restraint
Embargo
Total ban on Imports or exports of a product
Customs regulations
Regulations on products that are different from generally accepted International standards
Exchange controls
Laws that require a company earning for an exchange, foreign currency, from its exports to sell the foreign exchange to a control agency, such as a central bank
Ethics
A set of moral standards for judging whether something is right or wrong
Component lifestyle
Lifestyle made up of a complex set of Interest, needs, and choices
Demography
The study of people’s Vital Statistics, such as their age, gender, race and ethnicity, and location
