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Intro To Business > Chapter 2 Economics > Flashcards

Chapter 2 Economics Flashcards

Economics

1
Q

Contingency Planning

A

preparing alternative course of action the firm can use if it’s primary plans don’t work out

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2
Q

Social Audit

A

is a systematic evaluation of an organization’s progress toward implementing socially responsible & responsive programs

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2
Q

“Greenwashing”

A

The use of deceptive marketing + advertising that portray the business as environmentally responsible

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2
Q

Socialism (Benefits)

A
  • social equality
  • free education
  • free health care
  • free child care
  • longer vacations
  • fewer work hours
  • more employee benefits
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3
Q

Brain Drain

A

The loss of the best and brightest people to other countries.

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4
Q

Business Cycle

A

The periodic rises and falls that occur in economics over time.

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4
Q

Brain Drain

A

The loss of the best & brightest people to other countries

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5
Q

Capitalism

A

* an economic system where all or most of the factors or production & distribution are privately owned & operated for profit (land, stores, factories, railroads) * Capitalism is THE foundation of the US economic system * it is FOR PROFIT * Owners decide: what to produce, how much, what to charge, how much to pay workers, natl or intl production

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6
Q

Chained Consumer Price Index (C-CPI)

A

consumers shift purchases as prices to up or down (ex: when beef gets expensive, people switch to chicken)

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7
Q

Command Economics

A

Economicsystems in which the government largely determines what goods and services get produced, who will get them, and how the economy will grow.

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8
Q

Communism

A
  • An economic and political system in which the government makes almost all economic decisions
  • Govt owns almost all the major factors of production
  • more intense version of SOCIALISM
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9
Q

Compliance Based Ethics Code

A

Emphasizes preventing unlawful behavior by incrasing control & penalizing wrongdoers

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10
Q

Consumer Price Index (CPI)

A

Monthly statistics that measure the pace of inflation and deflation in the form of:

  • housing
  • food
  • medical care
  • apparel
  • energy costs
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11
Q

Core Inflation

A

It’s the Consumer Price Index minus Food & Energy Costs

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12
Q

Corporate Social Initiatives

A

Includes forms of corporate philanthropy that are directly related to a company’s competencies

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13
Q

Deflation

A

A situation in which prices are declining.

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13
Q

Corporate Social Responsibility (CSR)

A

is the concern the businesses have for the welfare of society - not just their owners. Integrity/Fairness/Respect/Commitment

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15
Q

Four Degrees of Free Market Competition (PMOM)

A
  1. Perfect Competition 2. Monopolistic Competition 3. Oligopoly 4. Monopoly
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16
Q

Demand

A

The quantity of products that people are willing to buy at different prices at a specirfic time. Lower price = more demand

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17
Q

Depression

A

A severe recession, usually accompanied by deflation.

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18
Q

Disinflation

A

A situation in which price increses are slowing. (the inflation rate is declining)

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19
Q

Economics

A
  • The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals
  • The nation’s economy as a whole
  • Economics is comprised of: MacroEconomics and MicroEconomics
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20
Q

Equilibrium Point (aka: Market Price)

A

Where supply & demand lines cross which then becomes the “market price”

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21
Q

Ethics

A

Guide people’s decisions how to treat one another in an honest/responsible way

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22
Q

Ethics Officer

A

They are vital in enforcing the ETHICS CODE of a company/organization

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23
Q

Fiscal Policy

A
  • the policy related to increasing or decreasing taxes or governent spending
  • it’s the federal govt’s efforts to keep the economy stable
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24
Q

Four Additional Freedoms in Economic Success

A
  1. Freedom of Speech 2. Freedom to Worship 3. Freedom from Want 4. Freedom from Fear
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25
Q

Free Market

A
  • decisions about what & how much to produce by buyers & sellers
  • negotiates prices for goods/services, not determined by sellers
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25
Q

Free Market Capitalism Rights

A
  1. The right to own property (private ownership, buy/sell/use land, buildings, machinery, inventions, pass on to kids) 2. The right to own business & keep the profits (profits are incentives) 3. Freedom of Competition (free to compete w/other businesses & individuals) 4. Freedom of Choice (choose where to work & what career you want to follow, where to live, what to buy/sell)
27
Q

Free-market Economics

A

Economic systems in which the market largely determines what goods and services get produced, who gets them, and how the economy will grow.

28
Q

Gross Domestic Product (GDP)

A

The total value of final goods and services produced in a country in a given year.

29
Q

Inflation

A

A general rise in the prices of goods and services over time.

30
Q

Initiatives

A

the power or opportunity to do something before others do it - an “introductory step”

31
Q

Invisible Hand

A
  • A phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all.
  • Belief that biz owners start for “prosperity+growth” but it also helps the economy grow/prosper thru needed goods/services/ideas
  • Everyone benefits
32
Q

Keynesian Economic Theory

A

The theory that a government policy of increasing spending and cutting taxes could stimulate the economy in a recession.

33
Q

Laws

A

Laws are narrower & protect us from fraud, theft & violence

34
Q

MACROeconomics

A

The part of economics study that looks at the operation of a nation’s economy as a whole

35
Q

Market Price

A

is the price determined by supply & demand (aka: The Equilibrium Point)

36
Q

MICROeconomics

A
  • the study of the behavior of people & organizations in particular markets/industries for particular products/services
37
Q

Mixed Economics

A

Economic systems in which some allocation of resources is made by the market and some by the government.

38
Q

Monetary Policy

A
  • The managment of the money supply and interest rates by the Federal Reserve Bank
  • Raises & lowers interest rates
39
Q

Monopolistic Competition

A

The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different

41
Q

Monopoly

A

A degree of competition in which only one seller controls the total supply of a product or service, and sets the prices.

41
Q

Monopolistic Competition

A

* very large amounts of sellers * very similar products which buyers perceive as different (ex: t-shirt slogans)

43
Q

Monopoly

A

* ONE seller only * Controls total supply of products/services * Sets the Price

44
Q

National Debt

A

The sum of government deficits over time.

44
Q

Socialism (Negatives)

A
  • takes away business owner’s incentives
  • no job creation
  • no wealth creation
  • fewer inventions & less inovation
  • countries fall behind
  • loss of highly educated people (doctors/lawyerd/etc) which results in “brain drain”
46
Q

Oligopoly

A

A degree of competition in which just a few sellers dominate the market.

47
Q

Oligopoly

A

* A FEW sellers dominate the market * usually have a large investment * product difference are usually the reason for success (ex: Honda=reliable)

48
Q

Perfect Competition

A

*many sellers in a market & NONE are large enough to dictate the price * product appear to be identical * many sellers & identical products

49
Q

Philanthropy

A

goodwill to the human race and an act/gift done or made for humanitarian purposes

50
Q

Policies

A

Broad guidelines for action

51
Q

Producer Price Index (PPI)

A

An index that measures prices at a wholesale level.

52
Q

Recession

A

Two or more consecutive quarters of decline in the GDP

53
Q

Regulation Fair Disclosure (FD)

A

* requires that companies that release ANY information to share it with everyone, not just a few select people. * adopted by the SEC in the 2000’s * prevents Insider Trading

55
Q

Resource Development

A
  • The study of how to increase scarce resources and to create the conditions that will make better use of those resources
  • How scarce resources also greatly increase the need for available resources
  • Example: hydrogen = a new fuel
55
Q

Social Audit

A

it’s a systematic evaluation of an organization’s progress toward implementing socially responsible & responsive programs

57
Q

Social Entrepreneur

A

* starts & manages non profits * helps address social issues

58
Q

Socialism

A

An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among tha people.

58
Q

Social Justice

A

some think businesses have an influential & important role in promoting “social justice” which includes:

  • charity is not enough
  • businesses need to give more & clean up environment
  • provide computer lessons
  • care for elderly
  • support low-income families
59
Q

Socialism

A

The belief that the most basic businesses (steel/coal/utilities) should be government-owned so profits can be evenly distributed to the people

60
Q

Stagflation

A

A situation when the economy is slowing but prices are going up anyhow.

61
Q

Strategies

A

Determine the best way to use resources

62
Q

Supply

A

The quantity of products that manufacturers (or owners) are willing to sell at different prices at a specific time (hint: suppliers selling)

63
Q

Supply

A

The quantity of products that manufactures or owners are willing to sell at different prices at a specific time.

65
Q

The Green Movement

A
  • has had a positive impact on the US Labor Force by creating jobs in new inventive industries
  • solar power - wind power - biodiesel - ethanol
66
Q

Top Management

A
  • the highest levels of management
  • consists of the President & other key company executives who develop strategic plans
68
Q

Unemployment Rate

A

The number of civilians at least 16 years old who are unemployed and tried to find a job within the prior four weeks.

69
Q

What TWO major tools manage the economy?

A
  1. Fiscal Policy 2. Monetary Policy
70
Q

Thomas Carlyle

A

Called economics the “dismal science” due to Thomas Malthus’ believing soon the world would have too many people & too little food (overpopulation)

71
Q

Neo-Malthusians

A

Follow Thomas Malthus’ view of overpopulation & no food. Their beliefs are:

  • radical birth control
  • forced abortions
  • sterilization

Slow-growth countries (no babies) are: Japan, Germany, Italy, Russia, USA

72
Q

Adam Smith

A
  • Father of Economics
  • Wrote The Wealth of Nations (1776)
  • Freedom to own land & keep the profits
  • people work hard for rewards
  • believed creating more resources so people can become wealthier (not split fixed resources)

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