ch 3-4 Flashcards
4 economic shifts in the us
1600s : trading and bartering (service based economy)
1700s : farming (agriculture based economy)
1850s : industrial revolution (industry based economy)
1900s : invention of the computer (info based economy)
marketing indicators
they measure how well the economy is doing
4 : gross domestic product (gdp)
standard of living
unemployment rate
rate of inflation
gross domestic product
The total value of the goods and services produced in a country in a given year
to calculate, compute the sum of goods and services sold to customers, businesses, the gov, and other countries
standard of living
the level of material comfort as measured by the goods and services that are available/ the amt of goods and services ppl can buy w the money they have
The more goods and services produced per person, the higher the standard of living.
unemployment rate
the number of people who are able and willing to work but cannot find work during a given period.
Changes in the unemployment rate show whether an economy is picking up or slowing down.
inflation and deflation
general increase in the price of goods and services. With inflation, one’s buying power decreases because it costs more to buy goods and services.
causes :
war, increases in costs of salaries and raw materials, gov allows too much money to circulate in the economy
deflation : can occur when the supply is greater than demands.
general decrease in the price of goods and services. When an economy produces more goods than people want, sellers have to lower prices and cut production. As a result, people have less money to buy goods, so the demand continues to go down.
national debt
budget deficit : When the government spends more on programs than it collects in taxes, the difference in the amount is called a budget deficit.
to pay the difference govs have to borrow money from the public, banks, and other countries
national debt : the total amt of money the government owes.
If the debt gets too large, a nation can become dependent on other nations or unable to borrow more money. This is the case in many developing nations.
budget surplus : When a government’s revenue exceeds its expenditures during a one-year period, it has a budget surplus.
The government often uses a surplus to cut taxes, reduce the national debt, or increase spending for certain programs.
main source of income for a gov
taxes
Governments use tax money to pay for programs such as defense, education, and Social Security.
business cycle
prosperity, recession, depression, recovery
prosperity
peak economic activity
wages are higher so workers have more income, unemployment is low, businesses are opening, production of goods and services are high, greater demand
more people can buy houses so theres more work for builders
people buy more goods from other countries which helps other countries
recession
activity slows down, businesses make less and need fewer workers so the unemployment rate increases, so ppl have less money. gdp declines
A downturn in one industry can affect others. For example, a recession in the auto-making industry can lead to a recession in businesses that make parts for cars. When this happens, it is called the ripple effect.
depression
a deep recession that affects the entire economy and lasts for several years
high unemployment and low production.
usually spreads to related countries but can be limited to one. there are also a lot of unused manufacturing facilities
ethics
moral principles by which people conduct themselves personally, socially, and professionally
business ethics
rules based on moral principles about how businesses and employees ought to conduct themselves
diff cultures: diff ethics
unethical behavior must be paid for with higher prices
code of ethics
set of guidelines maintaining ethics in the workplace
sweatshop
shop or factory in which workers are employed for long hours at low wages and under unhealthy conditions.
OSHA
occupational safety and health administration
division of the U.S. Department of Labor. - sets and enforces work-related health and safety rules.
-Other agencies protect consumers, address discrimination in the workplace, and promote truthfulness in financial reporting.
employee/business violating code of ethics
employee may be fired or lose their license. business owner can be fined or jailed
conflict of lnterest
conflict between self interest and personal obligation
ethical decision questions
• Is it against the law? Does it violate company or professional policies?
• Even if everyone is doing it, how would I feel if someone did this to me?
• Am I sacrificing long-term benefits for short-term gains?
ethical decision makin gprocess
Identify the ethical dilemma.
2. Discover alternative actions.
3. Decide who might be affected.
4. List the probable effects of the alternatives.
5. Select the best alternative.
social responsibility
the duty to do what is best for the good of society. Businesses that follow ethical standards value integrity and honesty in employees. Ethics are an integral part of their business practices.
businesses have responsibility to
customers, society, employees, creditors and owners
responsibility to customers
Customers are a business’s first responsibility.
Businesses should offer a good, safe product or service at a reasonable price. The Food and Drug Administration (FDA) is a federal government agency that protects consumers from dangerous or falsely advertised products.
Fair competition between businesses is necessary for the marketplace to operate effectively. It is a major component of a market economy.
an find itself unprepared to compete.
