Chapter 2

Question 1

Productivity

Answer 1

Measure of economic growth that compares how much a system produces with the resources need to produce it.

Question 2

Research and development (R&D)

Answer 2

Those activities that are necessary to provide new products, services, and processes.

Question 3

Merger

Answer 3

The union of two companies to form a single new business.

Question 4

Gross national product (GDP)

Answer 4

Total value of goods and services produced by a national economy within a given period regardless of where the factors of production are located.

Question 5

Inflation

Answer 5

Occurrence of widespread price increase throughout an economic system

Question 6

Political – legal environment

Answer 6

Conditions reflecting the relationship between business and government, usually in the form of government regulation.

Question 7

Balance of trade

Answer 7

The total of a country’s exports (sales to other countries) minus its imports (purchases from other countries).

Question 8

Deflation

Answer 8

A period of generally falling prices

Question 9

National debt

Answer 9

The total amount of money that a country owes its creditors

Question 10

Purchasing power parity

Answer 10

Principle that exchange rates are set so that the price of similar products in different countries are about the same

Question 11

Real GDP

Answer 11

GDP calculated to account for changes in currency values and price changes

Question 12

Gross domestic product (GDP)

Answer 12

Total value of all goods and services produced within a given period by a national economy through domestic factors of production.

Question 13

Budget deficits

Answer 13

The result of the government spending more in one year than it takes in during that year

Question 14

Outsourcing

Answer 14

Strategy of paying suppliers and distributers to perform certain business processes or to provide needed materials or services

Question 15

External environment

Answer 15

Everything outside an organizations boundaries that might affect it.

Question 16

Fiscal policies

Answer 16

Policies whereby governments collect and spend revenues

Question 17

Consumer price index (CPI)

Answer 17

Measure of the prices of typical products purchased by consumers living in urban areas

Question 18

Divestiture

Answer 18

Occurs when a company sells parts of its existing business operations to another company

Question 19

GDP per capita

Answer 19

Gross domestic production per person

Question 20

Business process management

Answer 20

Approach by which firms move away from department – oriented organization and towards process – oriented team structures that cut across old departmental boundaries

Question 21

Poison pill

Answer 21

A defence management adopts to make a firm less attractive to an actual or potential hostile suitor in a takeover attempt

Question 22

Spinoff

Answer 22

Strategy of setting up one or more corporate units as new, independent corporations.

Question 23

Business cycle

Answer 23

Pattern of short-term ups and downs (expansions and contractions) in an economy

Question 24

Aggregate output

Answer 24

Total quantity of goods and services produced by an economic system during a given period

Question 25

Sociocultural environment

Answer 25

Conditions including the customs, values, attitudes, and demographic characteristics of the society in which an organization functions.

Question 26

Unemployment

Answer 26

The level of joblessness among people actively seeking work and an economic system.

Question 27

Economic environment

Answer 27

Conditions of the economic system in which an organization operates.

Question 28

Monetary policies

Answer 28

Policies whereby the government controls the size of the nation’s money supply.

Question 29

Acquisition

Answer 29

The purchase of a company by another, larger firm, which absorbs the smaller company into it operations.

Question 30

Strategic alliance

Answer 30

And enterprise in which two or more persons or companies temporarily join forces to undertake a particular project.

Question 31

Organizational boundary

Answer 31

What separates the organization from its environment.

Question 32

Horizontal merger

Answer 32

Companies within the same industry merge.

Question 33

Vertical merger

Answer 33

When a supplier and customer merge

Question 34

Conglomerate merger

Answer 34

When two unrelated companies merge

Question 35

MBTI teacher

Answer 35

Doralyn Heinrichs