Business and Economics

Question 1

The 5 sector circular flow model?

Answer 1

Consumers (Households), Businesses (Firms), Financial Institutions, The Government, The overseas sector

Question 2

What does the circular flow of income show?

Answer 2

It shows the connection between the 5 different sectors of an economy. It also shows where money is being injected into the economy and where the money is being leaked from the economy.

Question 3

What is the meaning of assets?

Answer 3

Items of value

Question 4

What is the meaning of corporate social responsibility?

Answer 4

When businesses consider the interests of shareholders, society and the environment when making economic and business decisions

Question 5

What is cost-benefit analysis?

Answer 5

A detailed examination of the strengths and weaknesses of different alternatives in order to see whether the benefits outweigh costs

Question 6

What is the meaning debt?

Answer 6

Money owned to external sources e.g. the bank

Question 7

What is the meaning of democratic factors?

Answer 7

Population characteristics that affect customer spending include age, gender, ethnicity, income, disposable income etc

Question 8

What is the meaning of entrepreneur?

Answer 8

A person who sets out to build a successful business in a new field

Question 9

What is the meaning of equity?

Answer 9

Funds contributed by business owner/s

Question 10

What is the meaning of franchise?

Answer 10

Involves buying the rights from another business to distribute it’s products under it’s name

Question 11

What is the meaning of incorporated?

Answer 11

refers to the process companies go through to become a separate legal entity from the owners

Question 12

What is the meaning of incorporation?

Answer 12

process whereby a company has become a separate legal entity from it’s owners (stakeholders)

Question 13

What is the meaning of initiative?

Answer 13

the ability to be resourceful and make good decisions

Question 14

What is the meaning of liabilities?

Answer 14

the debt owned by a business to others

Question 15

What is the meaning of liquidity?

Answer 15

the ability of a business to pay its short term debts on time

Question 16

What is the meaning of Niche Market?

Answer 16

A narrowly selected target market segment

Question 17

What is the meaning of partnership?

Answer 17

A business owned and operated between 2 and 20 people

Question 18

What is the meaning of customised approach?

Answer 18

When a business modifies their marketing strategies to take into account the differences among countries, cultures, religions and tastes

Question 19

What is the meaning of leakage?

Answer 19

When the government collects taxes from individuals and businesses.

Question 20

What is the meaning of injection?

Answer 20

Refers to money raised with taxation and government use of this money for infrastructure, healthcare, education etc

Question 21

What is the meaning of ethics?

Answer 21

Standards that define what is acceptable and unacceptable behavior, it is concerned with what is morally correct or incorrect

Question 22

What is the meaning of prospectus?

Answer 22

An essential disclosure document that a company has to issue at the time of issuing investment securities to the public

Question 23

What is the meaning of sustainable competitive advantage?

Answer 23

A company’s superiority over its competitors allows them to maintain the number 1 spot in the market

Question 24

What is the meaning of contraction?

Answer 24

An eventually declining GDP hits with a low point

Question 25

What is the meaning of expansion?

Answer 25

When the economy recovers and expands it will hit a peak

Question 26

What are some characteristics of an entrepreneur?

Answer 26

Adaptability, courage, innovative thinking, long-term focus, comfort with failure

Question 27

What are the 3 main ways of going into a business?

Answer 27

Setting up a new business form scratch, buying an existing business or purchasing a franchise

Question 28

What are the advantages and disadvantages of starting your business?

Answer 28

A: being your own boss, working your own hours, increased personal wealth. D: Long hours, risk of failure, constantly solving issues etc

Question 29

What is recession?

Answer 29

Recession is caused by the lack of spending and consumer demand reaches the lowest level.

Question 30

What is a boom?

Answer 30

The growth and prosperity of a business

Question 31

What is globalisation?

Answer 31

How the world interconnects especially with trade and business

Question 32

What is fiscal policy?

Answer 32

The use of the federal government's budget to achieve economic objectives

Question 33

What is market equilibrium?

Answer 33

The interaction of the forces of demand and supply determines the price of a good or service.

Question 34

What is global sourcing?

Answer 34

Going to under-developed countries and seeking out the cheapest materials and supplies

Question 35

What is the labor market?

Answer 35

The buying and selling of labour

Question 36

What is price mechanism?

Answer 36

The point at which the demand and supply curves intersect

Question 37

What is monetary policy?

Answer 37

The reserve bank using interest rates to achieve economic objectives

Question 38

What are imports?

Answer 38

Goods and services purchased by local consumers from Overseas businesses

Question 39

What are exports?

Answer 39

Goods and services sold by local businesses to overseas customers

Question 40

What is an on-demand business?

Answer 40

providing services to the consumers when they want them (e.g. they do not have to wait in line)

Question 41

What is an offshore business?

Answer 41

Offshore refers to any (business) activity that takes place outside an entity's home base.

Question 42

What is a government business?

Answer 42

Owned and created by the government which focus on community services

Question 43

What is a not-for-profit business?

Answer 43

A business that provides to community and does not earn a profit the for its owners

Question 44

What is the meaning of supply?

Answer 44

refers to the total amount of a good or service that producers are willing and able to sell at various prices over a specific period of time. It reflects the availability of products in the market

Question 45

What is the meaning of demand?

Answer 45

refers to the quantity of a good or service that consumers are willing and able to purchase at various prices over a certain period of time. It reflects consumer desire and purchasing power.

Question 46

What is the meaning of market equilibrium?

Answer 46

refers to the point at which the quantity of a good or service supplied by producers equals the quantity demanded by consumers.

Question 47

What is the meaning of small-to-medium-enterprise?

Answer 47

businesses with fewer than 200 employees.

Question 48

What is the concept of a situational analysis?

Answer 48

SWOT. the process of gathering information on the internal and external environments to assess the firm's current strengths, weaknesses, opportunities and threats and to guide its goals and objectives.

Question 49

What relationships do households and firms have?

Answer 49

They shares services, resources and goods