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Management tools and principles > Chapter 2 > Flashcards

Chapter 2 Flashcards

1
Q

Economy

A

Total of all economic activity in a given region

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2
Q

Economics

A

Study of how a society uses its scarce resources to produce and distribute goods and services

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3
Q

Microeconomics

A

Study of how individual actors make choices in response to changes in incentives, prices resources or methods of production

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4
Q

Macroeconomics

A

Branch of economics that studies how overall economy behaves

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5
Q

Factors of production

A

Economic resources, including natural resources, HR, capital, entrepreneurship and knowledge

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6
Q

Scarcity

A

Productive resource that has a limited supply

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7
Q

Trade-off

A

The more time you spend on an activity means less time for any other

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8
Q

Opportunity cost

A

Value of the most appealing alternative

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9
Q

Economic indicators

A

Statistics that measure the performance of the economy (GDP, Unemployment rate)

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10
Q

Durable-goods

A

Goods that typically last more than 3 years

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11
Q

Price indexes

A

A way to monitor the inflation or deflation

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12
Q

CPI

A

Statistic that measures changes in prices in goods and services people typically buy overtime

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13
Q

PPI

A

Statistical measure of price trends at the producer levels

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14
Q

GDP

A

The value of all goods and services produced by businesses located within the nation’s boarders, usually in a year

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15
Q

GNP

A

The value of all goods and services produced by country’s residents no matter where they live, usually in a year

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16
Q

Economic system

A

Policies that define a society’s particular economic structure

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17
Q

Planned system

A

Economic system in which the government controls most of the factors of production

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18
Q

Free-market system

A

Economic system in which decisions about factors of production are decided by the market’s buyers and sellers

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19
Q

Capitalism

A

Economic system based of economic freedom and competition

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20
Q

Regulation

A

Relying more on laws and policies than on market forces to govern economic activity

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21
Q

Deregulation

A

Removing regulations to allow the market to prevent excesses and correct itself overtime

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22
Q

4 major areas in which the government plays a role

A

Protecting stakeholders, Fostering competition, Encouraging innovation and economic development, Stabilizing and stimulating the economy

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23
Q

Monetary policy

A

Applied by the Fed, involves the control of money supply and interest rates to influence the economy

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24
Q

Fiscal policy

A

Use of government revenue and spending to influence the business cycle

25
Q

Antitrust legislation

A

Limit what businesses can and cannot do, to ensure that competitors have an equal chance

26
Q

Divesting

A

Selling some parts of the company or making other concessions

27
Q

Demand

A

Quantity that consumers are willing and able to buy at a given time for various prices

28
Q

Supply

A

Quantity that producers are willing and able to provide at a given time at various prices

29
Q

Demand curve

A

Graph that shows the quantity of a product that buyers will purchase at a given time at various prices

30
Q

Supply curve

A

Graph that shows the quantity of a product that producers are willing to provide at a given time at various prices

31
Q

Equilibrium price

A

The point at which quantity demanded equals quantity supplied

32
Q

Competition

A

Rivalry among businesses for the same customers

33
Q

Monopoly

A

A dominant company in a market to the degree it can control prices and shut out other competitors

33
Q

Pure competition

A

Multiple suppliers of whom none is dominant enough to control prices

33
Q

Oligopoly

A

A market situation in which a small number of suppliers provide particular goods and services and cn influence each other though production and pricing

34
Q

Monopolistic competition

A

Situation in which many sellers offer differentiated products and new suppliers can enter the market

35
Q

Recession

A

Period during which national income, employment and production all fall, often defined at least two quarters of decline in the GDP

36
Q

Business cycle

A

Fluctuations in the rate of growth that an economy experiences over a period of several years

37
Q

Unemployment rate

A

Percentage of the labor force currently without a job

38
Q

The 4 types of unemployment

A

Frictional, Seasonal, Structural, Cyclical

39
Q

Inflation

A

Steady rise in the average prices of g/s

40
Q

Deflation

A

Steady fall in the average prices of g/s

41
Q

Money

A

Anything generally accepted as a means of paying for g/s, serves as a medium of exchange, unit of accounting, store of value and standard of deferred payment

42
Q

Fiat money

A

Official currencies issued through the government fiat (U.S. dollar, Euro)

43
Q

Cryptocurrency

A

Currency represented by digital tokens

44
Q

Non-fungible tokens (NFTs)

A

Digital certificates that convey sole ownership of a digital asset, cannot be replaced by something else unlike crypto

45
Q

Money supply

A

The amount of money in circulation at any given time

46
Q

M1

A

Cash held by the public and money deposited in a variety of checking accounts

47
Q

M2

A

M1+ saving accounts

48
Q

Federal Reserve system

A

Central banking system in the U.S. responsible for banks and implementing monetary policy, maximizing employment, keeping prices stable and keeping inflation under control

49
Q

Fed funds rate

A

Interest rate that member banks charge each other to borrow money overnight from the funds they keep in the Fed accounts

50
Q

Discount rate

A

Interest rate that member banks pay when they borrow funds from the Fed

51
Q

Prime rate

A

Interest rate a bank charges its best loan customers

52
Q

Investment banks

A

Firms that offer a variety of services related to initial public stock offerings, mergers and acquisitions etc..

53
Q

Commercial banks

A

Banks that accept deposits, offer various checking and saving accounts and provide loads. Rather applied to serve businesses only, not customers

54
Q

Retal bank

A

Banks that serve customers with checking and saving accounts, debit and credit cards and loans for home, cars etc…

55
Q

Fintech

A

Technologies with potential to improve of disrupt the financial services

56
Q

What 5 major fields does fintech explore?

A

Making financial services more inclusive
Improving the efficiency of financial activities
Strengthening the security of financial systems
Improving the customer experience in financial services
Enhancing financial decision-making

57
Q

Neobanks

A

Banks that provide services entirely through mobile and digital channels

Management tools and principles (15 decks)

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