chapter 1: Business activity Flashcards
Business
organization that produces goods and services
consumer goods
goods and services to customers
producer goods
goods and services produced by one business for another
private sector
business organizations owned by individuals or groups of individuals
public sector
business organisations owned by central or local governments
private enterprise
business ownership by ordinary people, in the private sector
public enterprise
a business that is owned by the government in the public sector
social enterprise
a business that is set up to help society rather than to make a profit
objectives
goals or targets set by a business
economies of scale
financial advantages of producing something in very large quantities
profit satisfying
making enough profit to satisfy the needs of the business owners
profit maximizing
making as much profit as possible in a given time period
unincorporated business
no legal distinction between owner and the business
corporated business
a business that has a separate legal identity from that of its owners
sole trader
business owned and operated by one person
partnership
a business owned by two or more people
deed of partnership
a binding legal document which states the formal rights of partners
franchise
structure in which a business [the franchisor] allows another operator [the franchisee] to trade under their name
costumer cooperative
owned and controlled by members
worker cooperatives
businesses in which its employees share ownership
limited liability
shareholders are legally responsible for the debts of a company according to how many shares they own
unlimited liability
owner of a business is personally liable for all business debts
prospectus
document produced by a company that wants the public to buy shares.
regulatory control
official power to control business activity
flotation
the process of a company ‘going public’
limited company
business organisations that have a separate legal identity from that of their owners [incorporated business]
memorandum of association
A document that sets out the constitution and states key details [e.g. name, address] about a limited company
articles of association
a document that contains details of how a company is organized [e.g. rights of shareholders]
certificate of association
document needed before a new company can start doing business.
private limited company
a private company which can only transfer shares privately
public limited company
a limited company whose shares are freely sold and traded, with a minimum share capital
multi nationals
large business with significant production or service operations in at least two different countries
natural monopolies
market where it is more efficient to have just one organisation meeting total market demand
public corporations
business organizations owned and controlled by the state/ government
privatization
transfer of public sector resources to the private sector [business]
primary sector
production involving the extraction of raw materials from the Earth
secondary sector
production involving the conversion of raw materials into finished and semi-finished goods
tertiary sector
production of services in the economy
de- industrilisation
the decline in manufacturing
trade bloc
group of countries situated in the same region that join together and enjoy trade free of barriers
brownfield sites
areas of land which were once used for urban development
greenfield sites
undeveloped land
globalization
the growing integration of the world’s economies
exports
goods and services sold overseas
imports
goods and services bought from overseas
visible trade
trade in physical goods
invisible trade
trade in services
balance of trade
difference between visible exports and visible imports
exchange rate
value of one currency in terms of another
transactions
business deals or actions
dumping
where a business sells goods in another country often below cost
fiscal policy
using changes in taxation and government expenditure to manage the economy
direct tax
charge on income
indirect tax
levied on spending
multiplier effect
the employees will spend some of the money received by these businesses from the government. boosts demand for all types of businesses.
protectionism
use of trade barriers to protect domestic producers
trade barriers
measures designed to restrict trade
tariffs
taxes on imported goods
quota
physical limit on the amount allowed into the country
subsidy
financial support given to a domestic producer to help compete with overseas firms
administrative barriers
the use of strict health and safety or more environmental regulations and specifications to make importing more awkward
interest
the price paid for the use of borrowed money
monetary policy
using changes in interest rates and the money supply to manage the economy
