Chapter one Flashcards
Exploring the World of Business and Economics
business
The organized effort of individuals to produce and sell, for a profit, the goods and services that satisfy society’s needs
business cycle
The recurrence of periods of growth and recession in a nation’s economic activity
capitalism
An economic system in which individuals own and operate the majority of businesses that provide goods and services
command economy
An economic system in which the government decides what goods and services will be produced, how they will be produced, for whom available goods and services will be produced, and who owns and controls the major factors of production
consumer price index
a monthly index that measures the change in prices of a fixed basket of goods purchased by a typical consumer in an urban area
depression
a severe recession that lasts longer than a typical recession and has a larger decline in business activity compared to a recession
e-business
the organized effort of individuals to produce and sell for a profit, the goods and services that satisfy society’s needs through the facilities available online
economy
the way in which people deal with the creation and distribution of wealth
entrepenuer
a person who risks time, effort, and money for to start and operate a business
factors of production
inputs and resources used to produce goods and services
fiscal policies
government influence on the amount of saving and expenditures; accomplished by altering the tax sturcture and by changing the levels of government spending
gross domestic product (gdp)
the total dollar value of all goods and services produced by all people within the boundaries of a country during a specified time period
invisible hand
describes how an individuals own personal gain benefits others and a nation’s economy
who created the term invisible hand
Adam smith
mixed economy
an economy that exhibits elements of both capitalism and socialism
monetary policies
federal reserve’s actions to promote maxium employment, stabilize prices, and increase or decrease interest rates
producer price index
a monthly index that measures prices that producers receive for their finished goods
productivity
the average level of output per worker per hour
profit
What remains after all business expenses have been deducted from sales revenue
recession
two or more consecutive three month periods of decline in a country’s GDP
stakeholders
all the differret people or groups of people who are affected by an organization’s policies, decisions, and activites
standard of living
A loose, subjective measure of how well off an individual or a society is, mainly in terms of want satisfaction through goods and services
unemployment rate
the percentage of a nation’s labor force unemployed at anytime
deflation
a general decrease in the level of prices
federal deficit
a shortfall created when the federal government spends more in a fiscal year than it receives
inflation
a general rise in the level of prices
macroeconomics
study of the national economy and the global economy
market economy
an economic system in which businesses and individuals decide what to produce and buy, and the market determines prices and quantities sold
microeconomics
the study of decisions made by individualsand businesses
national debt
the total of all federal deficits
socialism and communism
are both command economic systems
