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College > Foundation of ENTR midterm > Flashcards

Foundation of ENTR midterm Flashcards

1
Q

Value is the

A

Relationship between the price of a good or service and the benefits that it offers it’s customers

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2
Q

In the context of the competitive environment dimension of a business, a product has value when its benefits to the customer are _____ than the price the customer pays

A

Lesser

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3
Q

One of the factors of production that includes machines, tools, buildings, information, and technology

A

Capital

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4
Q

In the context of your career choice, will the broader economy influence the level of your personal financial success

A

Yes

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5
Q

When companies introduce innovative products and services worldwide, it ______ the standard of living for populations

A

Increases

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6
Q

Does the balance of trade play a central role in determining the balance of payments

A

Yes

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7
Q

Do China and India represent a smaller opportunity in terms of size and economic growth despite their huge populations

A

No

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8
Q

Are quotas Taxes levied against imports

A

No

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9
Q

Do socially responsible employers stick to state laws and don’t go beyond them when it comes to providing a good working environment to employees

A

No

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10
Q

Is consumerism a social movement focused on the consumption of highly viable expensive items that improve a persons individual image among their peers

A

No

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11
Q

What has made ethics and social responsibility complicated for workers at every level

A

Globalization

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12
Q

What means weaving environmentalism throughout the business decision making process

A

Sustainable development

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13
Q

What was a drawback of communism

A

Inability of people to make basic choices such as where to work or what to buy

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14
Q

What places paramount importance on the need for government to intervene in the economy to ensure a fair and equitable distribution of income

A

Capitalism

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15
Q

What measure the total value of all imports and exports of a nation on a quarterly basis

A

GDP

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16
Q

In what communication does the tone of voice and body language mean more to the listener than the verbal content of the message

A

Face to face

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17
Q

What happens when one transmits relevant meaning to ones audience

A

Effective communication

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18
Q

As _____ gains speed, intercultural communication will become less important to business success

A

Globalization

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19
Q

Should a business email have a compelling subject line

A

Yes

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20
Q

What occurs when 2 i dependent businesses combine to form a new organization

A

Merger

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21
Q

Is a corporation a voluntary agreement under which 2 people acts as co owners of a business for profit?

A

No

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22
Q

What can be used by companies to move into foreign markets

A

Franchising

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23
Q

Is there a limit on the number of partners who can participate in a general partnership

A

No

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24
Q

Which control is a deep seated sense that the individual is personally responsible for what happens in his or her life

A

Internal locus of control

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25
Q

The global entrepreneurship monitor (GEM) shows that people living in high willing countries tend to be ______ willing time start their own businesses than people living in low income countries

A

Less

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26
Q

Do entrepreneurs feel a correlation between dollars earned and hours worked

A

Yes

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27
Q

Someone decides to check with their accountant to see how much money they owe to a supplier. Should they ask for the balance sheet

A

Yes

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28
Q

If asked to prepare a customized report of cost overruns at a facility, what type of accountant are you

A

Managerial

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29
Q

Would statement would be helpful for a bank determining if a business is going to be capable of paying back a loan

A

Statement of cash flows

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30
Q

What is the current ratio

A

current assets/ current liabilities

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31
Q

What normally covers a one year period and shows projected cash inflows and outflows for each month

A

Cash budget

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32
Q

Successful firms embrace

A

Change and are Actively looking for ways to expand their business

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33
Q

Value:

A

Relationship between the price of a good or a service and the benefits it offers. Thing I’m getting is worth more than the money I’m giving up

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34
Q

Business:

A

Organization or activity that provides goods and services in an effort to earn a profit

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35
Q

Profit

A

Revenue- Expenses

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36
Q

Loss:

A

When Expenses > Revenue

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37
Q

Entrepreneurs:

A

People who risk their time, money, and other resources to start and manage a business

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38
Q

Standard of living:

A

Quality and quantity of goods and services available to a population

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39
Q

Quality of life:

A

Overall sense of well-being

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40
Q

Nonprofits

A

Business-like establishments that employ people and produce goods and services

Aim to contribute to the community rather than generating financial gain

Goal- Contribute to community vs make financial gain for owner

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41
Q

Registered B Corporations

A

See how you score

a rigorous assessment of impact on 
workers, 
customers, 
community, and 
environment
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42
Q

Factors of production:

A

Fundamental resources required to achieve organizational objectives

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43
Q

What are the Factors of production:

A

Natural resources
Capital
Human resources
Entrepreneurship

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44
Q

Business Environment

A

Setting in which business operates

Makes critical difference in whether an economy thrives or disintegrates

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45
Q

Speed-to-market:

A

Rate at which a firm transforms concepts into actual products

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46
Q

Bleeding-edge firms

A

Launch products that are too far ahead of the market

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47
Q

Leading-edge firms

A

Offer products as the market becomes ready to embrace them

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48
Q

Workforce Advantage

A

A key resource for firm’s competitive advantage

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49
Q

World Wide Web:

A

Allows computer users to easily access and share information on the Internet

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50
Q

e-commerce:

A

Business transactions conducted online, typically via the Internet

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51
Q

Demographics

A

Measurable characteristics of a population

Population size and density, age, gender, race, education, and income

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52
Q

Social Envrironment

A

Diversity, aging population, rising worker expectations, ethics and social responsibility

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53
Q

Free trade:

A

International political economic movement designed to help goods and services flow more freely across international boundaries

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54
Q

General agreements on tariffs and trades (GATT):

A

International trade agreement that lowers tariffs and promotes free trade worldwide

Lowered prices and increased quality across product categories

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55
Q

Global environment issues that affect economies

A

War and Terrorism
Disease
Natural Disasters

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56
Q

Economy

A

Financial and social system of how resources flow through society

system through which resources flow, what do they value and use resources for, goals and outcomes

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57
Q

Economics

A

Study of the choices made by people, companies, and governments to allocate society’s resources

determining how and why resources being used study

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58
Q

Macroeconomics:

A

Study of a country’s overall economic dynamics

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59
Q

Microeconomics:

A

Study of smaller economic units

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60
Q

Global Economic Crisis

A

Began when the dot-com bubble burst in 2000, followed by the 9/11 terrorist attacks in 2001
Stock market dropped
Unemployment rate increased
Economy was on the brink of recession

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61
Q

Subprime mortgage loans

A

Granted to borrowers with low credit scores

Provided lenders higher return than many other investments

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62
Q

Balloon mortgage-

A

talk about monthly payment vs terms, for the 1st X years. But steep staggered payments increasing
But when they had to refinance when they all did at once bc of bubble burst. Banks lost so much money.
Business that were doing well couldn’t get a loan, starting out couldn’t get a loan, people who usually could couldn’t get a loan

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63
Q

Troubled Assets Relief Program (TARP)

A

Introduced as an economic bailout plan

Successful businesses couldn’t get loans
Money put in economy so big companies could get load, they would have to pay it back
Tax payer money used to help big companies
No bailout for small successful companies

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64
Q

Government passed the ______ to help the nation recover from a financial disaster
Included cutting taxes, building infrastructure, and investing in green energy

A

American Recovery and Reinvestment Act

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65
Q

Government efforts to influence the economy through taxation and spending

A

Fiscal Policy

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66
Q

How much have we decided we are going to borrow

Maximum amount Congress lets the government borrow

A

Debt ceiling:

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67
Q

Across-the-board spending cuts and sharp tax hikes to decrease the U.S budget deficit

A

Fiscal cliff -

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68
Q

Overage that occurs when revenue is higher than expenses over a given period of time

A

Budget surplus

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69
Q

Shortfall that occurs when expenses are higher than revenue over a given period of time

A

Budget deficit

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70
Q

Sum of all the money that the federal government has borrowed over the years and not yet repaid

A

Federal debt

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71
Q

Federal Reserve decisions that shape the economy by influencing interest rates and the supply of money

Take money out of supply, raise interest rates to banks
Govt can buy and sell securities
Need to regulate to balance recession and inflation
Taking money in and out of circulation

A

Monetary Policy

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72
Q

Purpose - To influence the size of the money supply

Influencing how much free spending money you will have to spend

A

Federal Reserve

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73
Q

Includes all currency plus checking accounts and traveler’s checks

A

M1 money supply:

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74
Q

Includes all M1 money supply plus most saving accounts, money market accounts, and certificates of deposit

A

M2 money supply:

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75
Q

Federal Reserve function of buying and selling government securities

A

Open market operations

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76
Q

Rate of interest that the Federal Reserve charges when it loans funds to banks

A

Discount rate

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77
Q

Rule set by the Federal Reserve, which specifies the minimum amount of reserves a bank is required to hold

A

Reserve requirement

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78
Q

Fundamental Rights of Capitalism

A

Right to own a business and keep after-tax profits
Right to private property
Right to free choice
Right to fair competition

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79
Q

Many competitors selling virtually identical products

Agriculture
Virtually same products

A

Pure Competition

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80
Q

Many competitors selling differentiated products

Lots of different ppl selling products
T-shirt sellers

A

Monopolistic:

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81
Q

Handful of competitors selling products that can be similar or different

Small # of competitors
High barriers to entry

A

Oligopoly:

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82
Q

Single producer dominating the industry, leaving no room for competitors

A

Monopoly:

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83
Q

arises when a single supplier is more efficient than multiple, competing ones

A

Natural monopoly

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84
Q

Government owns and operates key enterprises that directly affect public welfare

A

Socialism:

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85
Q

Public ownership of all enterprises

Under the direction of a strong central government

A

Communism:

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86
Q

Embody elements of planned and market-based economic systems

Help in meeting the needs of the citizens

A

Mixed Economies

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87
Q

Process of converting government-owned businesses to private ownership

Charter schools
Prisons

A

Privatization:

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88
Q

Total value of all final goods and services produced within a nation’s physical boundaries over a given period of time
Vital measure of economic health

How is the economy doing
How is it growing
Measurement tool

A

Gross domestic product (GDP)

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89
Q

Percentage of people in the labor force over age 16 who do not have jobs and are seeking employment

A

Unemployment rate:

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90
Q

When it is possible to find better jobs

A

Frictional unemployment -

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91
Q

Unemployment for a longer term as skills are no longer relevant

A

Structural unemployment -

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92
Q
  • Layoffs during recessions
A

Cyclical unemployment

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93
Q

Job loss related to the time of year

A

Seasonal unemployment -

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94
Q

Periodic contraction and expansion of the economy

A

Business Cycle

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95
Q

Period of economic downturn

A

Contraction:

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96
Q

Marked by a decrease in the GDP for two consecutive quarters

A

Recession:

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97
Q

: Long-lasting recession

A

Depression:

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98
Q

Period of rising economic growth and employment

A

Recovery

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99
Q

Period of strong economic growth and high employment

A

Expansion:

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100
Q

Measure used to evaluate economic well-being

A

Price Levels

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101
Q

Period of rising average prices across the economy

A

Inflation:

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102
Q

Average monthly inflation rate of more than 50 percent

A

Hyperinflation:

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103
Q

Period of slowing average price increases

A

Disinflation

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104
Q

Period of falling average prices

A

Deflation:

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105
Q

Evaluates the change in the weighted-average price of goods and services that an average consumer buys each month

Average price of things ppl buy in average month
Is it higher or lower

A

Price indexes to evaluate inflation

!! Consumer price index (CPI):

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106
Q

Evaluates the change over time in the weighted-average wholesale prices

A

Producer price index (PPI):

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107
Q

Relationship between the production of goods and services and the resources required to produce them

A

Productivity:

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108
Q

es economies stronger, higher stanndards of living

A

Trade

Reduces barriers to trade with new tech

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109
Q

BRIC countries - Brazil, Russia, India, and China
Migration of labor-intensive, low-wage manufacturing jobs away from China has benefited their economic growth
Vietnam, the Philippines, and Bangladesh
Migration of labor-intensive, low-wage manufacturing jobs away from China make them beneficiaries of economic growth

A

Emergine Economies, low wage jobs

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110
Q

3 Reasons for International Trade

A

Access to factors of production
- International trade helps even out some of the resource imbalances among nations

Reduced Risk
- Global trade reduces dependence on one economy, lowering the risk for multinational firms

Inflow of innovation
-International trade is a source of new ideas for companies

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111
Q

Opportunity of giving up the second-best choice when making a decision

what u give up

A

Opportunity cost:

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112
Q

When a country produces more of a product than other nations using the same amount of resources

A

Absolute advantage:

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113
Q

When a country makes products at a lower opportunity cost than other countries

A

Comparative advantage:

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114
Q

Overage that occurs when the total value of a nation’s exports is higher than the total value of its imports

A

Trade surplus

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115
Q

Shortfall that occurs when the total value of a nation’s imports is higher than the total value of its exports

A

Trade deficit

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116
Q

Basic measure of the difference in value between a nation’s exports and imports

A

Balance of Trade

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117
Q

Measure of the total flow of money into or out of a country

A

Balance of Payment

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118
Q

: Overage that occurs when more money flows into a nation than out of it

A

Balance of payment surplus:

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119
Q

Shortfall that occurs when more money flows out of a nation than into it

A

Balance of payment deficit:

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3
4
5
Perfectly
120
Q

Measurement of the value of one nation’s currency relative to the other nation’s currency

A

Exchange rates

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121
Q

International trade that involves barter of products for products rather than for currency

A

Countertrade

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122
Q

Contracting with foreign suppliers to produce products

A

Foreign outsourcing

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123
Q

Buying products domestically that have been produced or grown in foreign nations

A

Importing

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124
Q

Selling products in foreign nations that have been produced or grown domestically

A

Exporting

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125
Q

Authority granted by a domestic firm to a foreign firm for:
The rights to produce and market its product
Using its trademark/patent rights in a defined geographical area

Grant a company in another country to produce and market their product and they pay portion of sales

A

Foreign licensing:

126
Q

Firm provides the rights to produce and market its products to franchisees in other countries
Applicable only if the franchisee agrees to specific operating requirements

more restrictions

A

Foreign franchising:

127
Q

When firms acquire foreign firms or develop new facilities from ground up in foreign countries

A

Direct investment

128
Q

When two or more companies join forces to pursue specific opportunities

A

Joint ventures

129
Q

Voluntary agreement in which two or more people act as co-owners of a business for profit

Not creating a new entity, just working together

A

Partnership

130
Q

Agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses

2 or more firms work together in pieces

A

Strategic alliance

131
Q

3 Barriers to International Trade

A

Socio Cultural differences
Economic Differences
Political and Legal Differences

132
Q

Differences among countries in language, attitudes, and values

A

Sociocultural differences

133
Q

Less-developed markets require innovation and efficiency

A

Economic differences

134
Q

Country’s physical facilities that support economic activity

A

Infrastructure:

135
Q

Laws and regulations - International businesses need to comply with:

A

International legal standards
Laws of their own countries
Laws of their host countries

136
Q

Influences whether a nation is attractive to foreign business

A

Political climate

137
Q

National policies designed to restrict international trade

A

Protectionism:

138
Q

Taxes levied against imports

A

Tariffs:

139
Q

Limitations on the amount of specific products that may be imported from certain countries during a given time period

A

Quotas

140
Q

Limitations on the amount of specific products that one nation will export to another nation

A

Voluntary export restrains (VERs):

141
Q

Complete ban on international trade of a certain item, or a total halt in trade with a particular nation

A

Embargo:

142
Q

Unrestricted movement of goods and services across international borders
International trade treaty that is designed to encourage worldwide trade among its members

A

Free Trade

143
Q

Permanent global institution that promotes international trade and settles international trade disputes

A

World Trade Organization (WTO)

144
Q

International cooperative of 188 member countries, working together to reduce poverty in the developing world

A

World Bank

145
Q

Organization of 188 member nations that promotes international economic cooperation and stable growth

A

International Monetary Fund (IMF

146
Q

ah

A

Trading bloc

147
Q

Countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among member nations

A

Common Markets

148
Q

Treaty among the United States, Mexico, and Canada

Eliminated trade barriers and investment restrictions

A

North American Free Trade Agreement (NAFTA):

149
Q

World’s largest common market composed of 28 European nations

A

European Union (EU):

150
Q

Set of beliefs about:
Right and wrong
Good and bad

A

Ethics

151
Q

Ethical norms that apply to people across a broad spectrum of situations

widely accepted across countries and times (Don’t kill innocent ppl)

A

Universal ethical standards:

152
Q

Application of right and wrong, good and bad, in a business setting

Different societies have different beliefs
If follow rules, you can still fail here

A

Business ethics:

153
Q

Decisions that involve a conflict of values

Not clear cut

A

Ethical Dilemmas

154
Q

Are Universal Ethical Standards universal?

A

Depends on how we define the object of these beliefs, unless is always there

155
Q

Ethics and the individual

A

Influenced by personal needs, family, culture, religion, and personality traits
Business leaders who scored high on personal empathy exhibited high levels of ethical leadership

Influenced by culture
Standards of right and wrong
Individuals bring their effects to work

156
Q

Ethics and the organization

A

Organizations influence the ethical conduct of employees
Can change quickly with a change of leadership – Both for the positive and the negative

The organization can affect the ethical behavior of employees
You want to influence them

157
Q

Elements of a strong culture

A

Comprise ethics-related actions at all levels of an organization and accountability for those actions

Make sure behavior is enforced at all levels of org and equally accountable

158
Q

Establishing an ethical culture

A

Involves backing up ethical words with documented practices, processes, and procedures

Create a culture so we know what the standards
Broad documents to support coworkers

159
Q

Formal written document that defines the ethical standards of an organization
Gives employees the information required to make ethical decisions across a range of situations

A

Code of Ethics

160
Q

Steps for Implementation of Code of Ethics

A
  • Get executive buy-in and commitment to follow through
  • Establish expectations for ethical behavior at all levels of the organization
  • Integrate ethics into mandatory staff training
  • Ensure that the ethics code is global and local in scope
  • Build and maintain a clear, trusted reporting structure for ethical concerns and violations
  • Establish protection for whistle-blowers
  • Enforce the code of ethics

Participative activity, need to believe it,
Say what it means at every level of the organizations
Need to train everyone, praise those that follow it
Code affect international trade, still applies. Make sure to help everywhere
Build a reporting structure to stay anonymous
Protection for those who report

161
Q

Employees who report their employer’s illegal or unethical behavior to either the authorities or the media

A

Whistle-blowers

162
Q

3 spectrums of Social Responsibility

A

Proactive
Make the world a better place, plan

Responsive
When an opportunity arises, participate casually

None
For profit does the bare minimum

163
Q

Groups that have a stake in the performance and actions of an organization
Who does our business matter to
What do I feel like I owe…

A

Stakeholders

164
Q

Organization has a responsibility toward:

A

Employees - Creating jobs that work (for whom?)
Customers - Delivering value by providing quality products at fair prices (what’s fair?)
Investors - Meeting legal requirements
Community - Contributing to society

165
Q

Deliberately designing products to fail in order to shorten the time between consumer purchases

Know that after a period, things will need to be replaced to make more money

A

Planned obsolescence:

166
Q

Sets higher ethical standards for public corporations and accounting firms

Need higher standards for legal things

A

Sarbanes-Oxley Act:

167
Q

Business donations to nonprofit groups

A

Corporate philanthropy:

168
Q

Marketing partnerships between businesses and nonprofit organizations

A

Cause-related marketing:

169
Q

Business contributions to the community through the actions of the business itself rather than donations of money and time

A

Corporate responsibility:

170
Q

Doing business to meet the needs of the current generation, without harming the ability of future generations to meet their needs

A

Sustainable development

171
Q

Developing and promoting environmentally sound products and practices to gain a competitive edge

A

Green Marketing

172
Q

Challenging issues faced by companies and individuals

A

Bribery & Corruption

173
Q

Evaluation of how well a firm is meeting its ethics and social responsibility goals

A

Social audit:

174
Q

Obstacles to effective communication

A

Communication barriers

175
Q

Interference that causes misinterpretation of information

A

Noise

176
Q

6 Types of Communication Barriers

A 
1. Physical
	It’s too loud
2. Language
	Speak different langueages
	Slang
3. Body language
	note language, tone
4. Perceptual
	gender, prejudiced
5. Organizational
	Status
6. Cultural
	Assumptions or norms
177
Q

Communication that does not use words

A

Nonverbal Communication

178
Q

Attentive listening that occurs when a listener focuses his or her complete attention on the speaker

A

Active listening

179
Q

Various ways in which a message is sent

The method of sending info

A

Communication Channels

180
Q

Methods for Effective Communication

A

Analyzing the audience
Being concise
Avoiding slang and bias
Bias: Preconception about members of a particular group

181
Q

Subject performs the action expressed by the verb

The Noun does the action

A

Active voice:

182
Q

Subject does not do the action expressed by the verb; rather, the subject is acted upon
not as effective, the taxes were done by the accountent

A

Passive voice:

183
Q 
Striking the right tone with the appropriate conversational style
Avoiding grammatical errors
Using block paragraphs
Using headings and bullets appropriately
Striking the right tone with the appropriate conversational style
Avoiding grammatical errors
Using block paragraphs
Using headings and bullets appropriately
A

Writing Effectively

184
Q

Creating and Delivering Verbal Presentation

A

Tell em what u gon tell em
Tell em
Tell em what u told em

185
Q

Single owner who manages the company

A

Sole proprietorship:

186
Q

Voluntary agreement between two or more co-owners of a business for profit
Work with more than one person
People are the business

A

Partnership:

187
Q

All partners take an active role in managing the business and have unlimited liability for claims against the firm

All working equally together

A

General partnership:

188
Q

Business is considered a legal entity that is separate and distinct from its owners

legal entity separate from owners
Sueing goes to business

A

Corporation:

189
Q

Establishes the existence of a new corporation

A

Articles of incorporation:

190
Q

can’t take away personal things

A

limited liability

191
Q

Offers limited liability to owners and flexible tax treatment

Has legal standing, it’s like it’s own person
Corp pays taxes
out double taxation

A

Limited liability company (LLC):

192
Q

Advantages and Disadvantages of Sole Proprietorship

A

pros
You determine everything
Retain profits
No corp taxes

cons
Raising money is harder
Can take from businesses
Heavy workflow

193
Q

Advantages and Disadvantages of Partnerships

A

Pros
More money options
Multiple skills
No double taxation

Cons
Person who is suing can choose those with the most assets
Arguments
	how ae decisions going to be made
	hard to leave
194
Q

Includes at least one general partner who actively manages the company and accepts unlimited liability

1 partner and accepts risk of limited libility
Give up some control

A

Limited partnership:

195
Q

All partners have the right to participate in the management and have limited liability for company debts

All partners participate

A

LLP:

196
Q

Offers limited liability to all its stockholders

Requires filing articles of incorporation, paying filing fees, and adopting of corporate bylaws

Can’t go sue owners
easier to accept funding
Need board of directors

A

C Corporation

197
Q

Organization that pools contributions from investors, clients, or depositors and uses these funds to buy stocks and securities

A

Institutional investors:

198
Q

Elected by stockholders to represent their interests

A

Board of Directors

199
Q

Advantages and Disadvantages of C Corporations

A 
Advantages
Limited liability
Permanence
Ease of transfer of ownership
Ability to raise financial capital 
Ability to make use of specialized management

Cons
Expensive and complicated
When in multiple states, options differ from state to state
Stocks & Corp pay taxes
Everyone needs to be able to see what you make

200
Q

More paperwork than C Corp
NO double taxation
Indiueal taxws

A

S Corp-

201
Q

not all states, smaoll stock holders

Owners participate in mananagmenet

A

Closed corps

202
Q

Exempt from taxes but have to be used for the cause
Still pay staff
audited heavily
Can’t make donations

A

Nonprofits

203
Q

One firm buys another firm

A

Acquisition:

204
Q

Two formerly independent business entities combine to form a new organization

A

Merger: `

205
Q

Transfer of total or partial ownership of some of a firm’s operations to investors or to another company

A

Divestiture:

206
Q

Created by filing a document and paying filing fees in the state where the business is organized
Organizers draft an operating agreement

Need to make a list on how u handle arguments
Formal filing documents

A

Forming and Managing an LLC

207
Q

Advantages and Disadvantages of Limited Liability Companies (LLCs)

A

No double tax hit
Simpler than corp but harder than single owner

Hard to get set up

208
Q

Licensing arrangement under which a franchisor allows franchisees to use its name, trademark, products, and business methods
Arrangement is in exchange for monetary payments (royalties)

A

Franchise

209
Q

Franchisor makes a product and licenses the franchisees to sell it

A

Distributorship:

210
Q

FranchiseExpansion into foreign markets is ____ because competition is less intense and less saturated

A

greater

211
Q

Advantages and Disadvantages of Franchising

A

More popular bc ppl know it

Costa a lot
Someone else owns it
If one owner does bad things, bad for the brand

212
Q

Contractual arrangement between a franchisor and franchisee

Spells out the duties and responsibilities of both parties

A

Franchise Agreement

213
Q

Description of all aspects of a franchise that the franchisor must provide to the franchisee

A

Franchise Disclosure Document (FDD)

214
Q

6 Terms Included under Franchise Agreements

A
  • Terms & Conditions
  • Fees & Other Payments
  • Training & Support
  • Specific Operational Requirements
  • Conflict Resolution
  • Assigned Territory
215
Q

6 Reasons ppl launch small businesses

A 
Financial Success 
Independence
Flexibility
Challenge
Survival
Call to action
216
Q

Attitude to change the world through goods or services

A

Entrepreneurial mindset

217
Q

Vision and self-reliance
Energy and confidence
Tolerance of uncertainty and failure

A

Characteristics of Entrepreneurial Mindset

218
Q

Deep-seated sense that an individual is personally responsible for what happens in his or her life

A

Internal locus of control

219
Q

Feeling buffeted by forces such as random luck and the actions of others

A

External locus of control

220
Q

Funding Options for Small Businesses

A 
Personal Resources
Loans
Crowdfunding
Angle Investors
Venture Capital firms
221
Q

Individuals who invest in start-up companies with high growth potential in exchange for a share of ownership

A

Angel investors

222
Q

Companies that invest in start-up businesses with high growth potential in exchange for a share of ownership

A

Venture capital firms

223
Q

Small Business Opportunities and Threats

A 
Opportunities:
Market niches
Personal customer service
Lower overhead costs
Technology
Threats:
High risk of failure
Lack of knowledge and experience
Less money and more regulatory burden
High health insurance costs
224
Q

Agency of the federal government designed to maintain and strengthen the nation’s economy
Aiding, counseling, assisting, and protecting the interests of small businesses

A

Small Business Administration (SBA)

225
Q

3 Tools for Business Success

A

Gaining experience
Learning from others and educating oneself
Accessing SBA resources

226
Q

Local offices that provide comprehensive management assistance to current and prospective small business owners

A

Small Business Development Centers (SBDCs)

227
Q

Organization that provides free, comprehensive business counseling for small business owners from qualified volunteers

A

SCORE (Service Corps of Retired Executives)

228
Q

Developing a business plan

Business plan:

A

Formal document that:
Describes a business concept
Outlines core business objectives
Details strategies and timelines for achieving objectives

229
Q

How Small Businesses Contribute to the U.S. economy

A

Create new jobs
Fuel innovation
Vitalize inner cities

230
Q

ENTR is around the world

A

High in lower-income countries as they aim to increase the per capita income (Micro Businesses in the developing world…Honduras example)
Low in countries that provide a high level of employment
High in countries with limited regulation and strong governmental support

231
Q

System for recognizing, organizing, analyzing, and reporting information about the financial transactions that affect an organization

Allows users to recognize patterns, organize, analyze, report

A

Accounting

232
Q

Users of Accounting Information

A 
Managers
Stockholders
Employees
Creditors
Suppliers
Govt agencies
233
Q

Provide services such as tax preparation, external auditing, or management consulting to clients on a fee basis

A

Public accountants

234
Q

Work within a company and provide analysis, prepare reports and financial statements, and assist managers

A

Management accountants

235
Q

Perform accounting functions for local, state, or federal government agencies

A

Government accountants

236
Q

Branch of accounting that prepares financial statements for use by owners, creditors, suppliers, and other external stakeholders

A

Financial Accounting

237
Q

Set of accounting standards used in the preparation of financial statements

A

Generally accepted accounting principles (GAAP):

238
Q 
Private board that establishes the generally accepted accounting principles used in the practice of financial accounting
ensure that financial statements are:
Relevant
Reliable
Consistent
Comparable
A

Financial Accounting Standards Board (FASB)

239
Q

Financial statement that reports the financial position of a firm by identifying and reporting the value of its:
Assets, liabilities, owners equity

A

Balance Sheet

240
Q

Resources owned by a firm

A

Assets

241
Q

Claims that outsiders have against a firm’s assets

A

Liabilities:

242
Q

Claims that a firm’s owners have against their company’s assets

A

Owner’s equity:

243
Q

Accounting Equation

A

Assets = Liabilities + Owner’s Equity

244
Q

Reports the revenues, expenses, and net income that resulted from a firm’s operations over an accounting period

A

Income Statement (P&L)

245
Q

Increases in a firm’s assets that result from activities intended to earn income

A

Revenue

246
Q

Resources that are used up as a result of business operations

A

Expenses

247
Q

Difference between revenue and expenses in a given period of time

A

Net income:

248
Q

Income Statement formula

A

Revenue – Expenses = Net Income

(profit/loss)

249
Q

Identifies the amount of cash that flowed into and out of a firm from the following types of activities (in a given accounting period):

Pinpoint if the firm is bringing in cash from it’s primary business/operations (selling its goods/services) or from a lucrative investment or one-time sale of land, equipment, etc.
Is this sustainable?

A

Statement of Cash Flows

250
Q
  • Sale of goods or services
A

Cash flows from operating activities

251
Q

Sale of fixed assets and financial assets bought as long-term investments

A

Cash flows from investing activities

252
Q

Issuing additional shares of a firm’s own stock or from taking out short-term and long-term loans

A

Cash flows from financing activities

253
Q

Simple statement that shows how retained earnings have changed from one accounting period to the next

A

Statement of retained earnings

254
Q

Shows how net income and dividends affect retained earnings

Shows changes in stockholders’ equity, such as changes that arise from the issuance of additional shares of stock

A

Stockholders’ equity statement

255
Q

Methods Used by Stakeholders to Understand Company’s Financial Statements

A

Getting an independent CPA firm to perform an annual external audit of the financial statements
Checking notes to financial statements
Looking for trends in comparative statements

256
Q

: Financial statement that compares account values reported on the financial statements over two or more years to identify changes and trends

A

Horizontal analysis

257
Q

Prepared after conducting the annual external audit of the financial statements

Verifying to see if the financial statements were properly prepared in accordance with the generally accepted accounting principles

A

Independent Auditor’s Report

258
Q

Management tool that explicitly shows how a firm will acquire and allocate the resources needed
To achieve its goals over a specific time period

A

Budgeting

259
Q

Budgeting Facilitates planning by requiring managers to:

A

Translate goals into measurable quantities

Identify the specific resources needed to achieve these goals

260
Q

Communicate an organization’s sales and production goals and the resources needed to achieve them

A

Operating budgets

261
Q

Focus on a firm’s financial goals and identify the resources needed to achieve them

A

Financial budgets

262
Q

Represent a firm’s overall plan of action for a specified time period

A

Master budgets

263
Q

Top management prepares the budget with little or no input from middle and supervisory managers

A

Top-down budgeting

264
Q

Middle and supervisory managers are allowed to participate actively in the creation of the budget

A

Bottom-up (or participatory) budgeting

265
Q

Created based on the assumption that there is a single level of sales
Real-world sales vary considerably from the forecasted value and the figures become inaccurate

A

Static Budget

266
Q

Developed over a range of possible sales levels and appropriate budgeted level of costs

A

Flexible Budget

267
Q

Involve payment of money or other resources

A

Out-of-pocket Costs

268
Q

Arise when a firm uses owner-supplied resources

A

Implicit Costs

269
Q

Remain the same when the level of production changes within some relevant range

A

Fixed Costs

270
Q

Vary directly with the level of production

A

Variable Costs

271
Q

Incurred directly as a result of some specific cost object

A

Direct Costs

272
Q

Result of a firm’s general operations and are not directly tied to any specific cost object

A

Indirect Costs

273
Q

Technique to assign product costs based on links between activities that drive costs and the production of specific products

A

Activity-based costing (ABC):

274
Q

Funds that a firm uses to acquire assets and finance its operations

Stuff that financing their operations
Core business concept
Rev not from operations is not dependable
Acquired from
Owners
Use earnings to buy stuff for business
Loans
Credit
Stocks
All reinvest into business
A

Financial Capital

275
Q

Functional area of business that is concerned with:
Finding the best sources
Uses of financial capital

A

Finance

276
Q

Goal of financial management is to

A

maximize the value of the firm to its owners

277
Q

Degree of uncertainty regarding the outcome of a decision

A

Risk

278
Q

Observation that financial opportunities that offer high rates of return are riskier than those offering lower rates of return

A

Risk-return tradeoff

279
Q

Computing ratios that compare values of key accounts listed on financial statements

A

Financial Ratio Analysis

280
Q

Measures the ability of a firm to obtain the cash it needs to pay its short-term debt

how quickly can you turn things into cash to pay short term debt

A

Liquidity ratios:

281
Q

Asset that can quickly be converted into cash with little risk of loss

need little to no risk

A

Liquid asset:

282
Q

Measures the effectivity of a firm in using its assets to generate revenue

A

Asset management ratios:

283
Q

Measures the extent to which a firm relies on debt financing in its capital structure

carrying too much debt

A

Leverage ratios:

284
Q

Measures the rate of return a firm earns on various measures of investment

A

Profitability ratios:

285
Q

Projection showing how a firm’s budgeted sales and costs will affect expected net income

A

Budgeted income statement

286
Q

Projected financial statement that forecasts the types and amounts of assets a firm will need to implement its future plans

A

Budgeted balance sheet

287
Q

Forecast of future cash flows that helps financial managers identify when their firm is likely to experience temporary shortages or surpluses of cash

looking for window : we’ve received stuff from our supplier, but no customer yet

A

Cash budget

288
Q

Granted by sellers when they deliver goods and services to customers without requiring immediate payment

Bought the supplies for finished goods but don’t have money to pay back for supplies yet so you can sell the good to pay them back

A

Trade credit:

289
Q

Providing short-term financing to firms by purchasing their accounts receivables at a discount

Someone else track down recievables

A

Factor Firm

290
Q

Arrangement between a firm and a bank; bank pre-approves credit up to a specified limit, provided that the firm maintains an acceptable credit rating

As long as nothing changes, I will lend you $ whenever up to $X
A

Line of credit:

291
Q

Bank makes a binding commitment to provide funds up to a specified credit limit at any time during the term of the agreement

During a time period, bank has money on hand for you
Charging you interest for money u borrow and a fee for the money you didn’t borrow

A

Revolving credit agreement:

292
Q

Short-term promissory notes issued by large corporations

Large firms, IOU, sell the IOU’s and pay it back during high points not low points
A

Commercial paper:

293
Q

Long-Term Financing Methods

A

Direct Investments from owners
long term debt
term loans
corp bonds

294
Q

: Part of a firm’s net income that is reinvested

A

Retained earnings:

295
Q

: Restriction that lenders impose on borrowers as a condition of providing long-term debt financing

Terms for loaning a lot of money

A

Covenant:

296
Q

Mix of equity and debt financing a firm uses to meet its permanent financing needs

How much debt you want to take on vs how much use equity (stocks)

A

Capital structure

297
Q

Magnifies the return on the stockholders’ investment when times are good
Reduces the financial return to stockholders when times are bad

A

Financial leverage

298
Q

Pros and Cons of Debt Financing

A

Pros
Interest payments that a firm makes on debt are a tax-deductible expense
Enables the firm to acquire additional funds without requiring existing stockholders to invest more of their own money or the sale of stock to new investors
Cons
Required to make fixed payments
Creditors often impose covenants on the borrower

299
Q

Pros and Cons of Equity Financing

A

Pros
More flexible and less risky than debt financing
Imposes no required payments
Cons
Doesn’t yield the same tax benefits as debt financing
Existing owners might not want a firm to issue more stock, since doing so might dilute their share of ownership
Company that relies mainly on equity financing forgoes the opportunity to use financial leverage

300
Q

Firm’s cash refers to

A

holdings of currency plus demand deposits

301
Q

Highly liquid assets that many firms list with their cash holdings
such as us treasury bills or money market mutual funds

A

Cash equivalents:

302
Q

Short-term marketable IOUs issued by the U.S. federal government

A

U.S. Treasury bills

303
Q

Fund that pools funds from many investors and uses these funds to purchase very safe, highly liquid securities

A

Money market mutual funds

304
Q

Setting credit terms
Establishing credit standards
Deciding on an appropriate collection policy

A

Managing accounts receivable

305
Q

Stocks of finished goods, work-in-process, parts, and materials that firms hold as a part of doing business

A

Inventories -

306
Q

Don’t be out of stock but don’t buy too much (don’t want to spoil or become bad)

A

Inventory management:

307
Q

Process a firm uses to evaluate long-term investment proposals

A

Capital Budgeting

308
Q

Dollar today is worth more than later dollar

A

time value of money

309
Q

Interest-earning deposit that requires the funds to remain deposited for a fixed term

A

Certificate of deposit (CD):

310
Q

Amount of money that, if invested today at a given rate of interest, would grow to become some future amount in a specified number of periods

A

Present value

311
Q

Sum of the present values of expected future cash flows from an investment, minus the cost of that investment

A

Net present value (NPV)

College (19 decks)

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