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Business studies > Jun Exam 2024 > Flashcards

Jun Exam 2024 Flashcards

1
Q

What are the three economic systems?

A
  • planned economic system (communism)
  • A market system (capitalism)
  • Mixed economy
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2
Q

What are some characteristics of a Market/Capitalist system?

A

Property is largely privately owned.
There is right to competition.
Prices are determined by supply and demand.
USA

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3
Q

What are some characteristics of a mixed economy?

A

State and private ownership of production, land and capital exist.
Profit is the main aim in the market side of the economy.
Some businesses are owned by state and some by individuals.
South Africa is a mixed economy.

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4
Q

What are some characteristics of Communist/Planned system?

A

No competition
Production land and capital is owned by the state.
Prices are determined by the state.
No profit motivation.
North Korea

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5
Q

Where did the earliest form of capitalism originate?

A

Rome, the Middle East, and the early Middle Ages.

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6
Q

What did industrialization lead to?

A

New ideology, which criticized capitalism.

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7
Q

Who created communism?

A

Karl Marx

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8
Q

What are 4 advantages of a market economy?

A

There is little interference from government.
Profit motive leads to new and innovative ideas.
Consumers have a wide range of products and services to choose from.
Businesses can choose what and how much they want to produce.

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9
Q

What are 4 disadvantages of a market economy?

A

-Workers are likely to be exploited with low wages for the sake of making more profit.
-Public goods such as healthcare, education and housing are not provided.
-Although economic growth occurs it is not always sustainable.
-The wealthy have the means to improve their situation, the rich become richer and the poor become poorer.

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10
Q

What are the three advantages of a planned economy?

A

Very low unemployment rates
All basic needs are provided by government.
Major National objectives are easier to achieve.

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11
Q

What are three disadvantages of a planned economy?

A

No variety/choice of products and services for consumers.
Money remains in the hands of a few and there is very trickling downt to the majority of the population.
Profit making is not a driving force in the economics system therefor productivity declines.

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12
Q

What are three disadvantages of a mixed economy?

A

Economic growth can be hampered by excessive government intervention.
Business cycles may cause period of high unemployment and inflation.
Income distribution is not equal and there may be a large gap between wealthy and poor.

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13
Q

What are three advantages of a mixed economy?

A

Encourage private business to make contributions that benefit local communities.
Government regulation can prevent wastage or pollution of scarce natural resources.
Foreign investments flow more easily into a mixed economy.

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14
Q

What is the global economy?

A

Refers to all economies in the world and the expansion of these products between these countries.

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15
Q

What does the global economy include?

A

The globalization of production, markets, finance, communications and the labor force.

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16
Q

What does IMF mean?

A

International Monetary Fund

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17
Q

What is WTO mean and what does it do?

A

World Trade Organization and it regulates trade between participating nations.

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18
Q

What does NAFTA mean?

A

North America Free Trade Agreements.

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19
Q

What does GATT mean?

A

General Agreement on Tariffs and Trade.

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20
Q

What has the global economy allowed consumers to do?

A

An expanding range of goods and made possible for investor to seek opportunities around the world.

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21
Q

What are some advantages of the global economy?

A

Improved technology has enabled better mobility of goods and services, labour and capital.
Consumers have more choices as a result of imported goods being freely available.
Global product pricing is more equal due to increased competition.

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22
Q

What is one disadvantage of global economy?

A

Globalization can take jobs away from well-paid workers in wealthy nations and create sweatshops.

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23
Q

What is the basic economic problem?

A

Consumers have unlimited wants and needs but the means to satisfy their needs and wants are limited.

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24
Q

What are the factors of production?

A

Natural resources, labour and capital.

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25
Q

Who are the participants in the economic system?

A

Households, the private sector, the public sector and the foreign sector.

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26
Q

Who are the main participants in the economic process?

A

Household as the household, on all factors of production, and sell them to businesses 

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27
Q

What is a market?

A

Place where goods and services are bought and sold by participants in the economic cycle.

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28
Q

What is a closed economy?

A

When goods and services are only sold and produced within a country.

29
Q

Draw the economic cycle.

A
30
Q

What are the factors of production?

A

Land, Labour, entrepreneurship and capital

31
Q

What is the remuneration for each FOP?

A

Capital - Interest
Entrepreneurship - Profit
Land - Rent
Labour - wages

32
Q

What is an open economy?

A

Goods and services are imported and exported to other countries.

33
Q

What are the three points in a definition of a market.

A

Exchange information, determine prices, and determine the quantity of goods to be exchanged at these prices.

34
Q

What is the foreign sector?

A

International trade with it refers to trade between countries.

35
Q

What are reasons for international trade?

A
  • Natural resources are unevenly distributed
  • climate differs between different regions.
  • labour specialization
  • Preferences wants and needs
  • income levels
  • improved transport and communication have also stimulated the demand for foreign products.
36
Q

What is an import?

A

When people buy things from another country and is brought to yours.

37
Q

What is an export?

A

When someone is selling goods and services to another country.

38
Q

What are currencies bought on

A

Bought and sold on the foreign exchange market.

39
Q

What is the supply of Randy’s created through?

A

Importing goods, Expenditures and paying interest.

40
Q

What is demand for Rand a result of?

A

South African goods being exported.
Services being rendered to foreigners by people in South Africa.
Receipts from tourists.

41
Q

What is an exchange rate?

A

The Exchange rate is the price of one currency expressed in the terms of another currency.

42
Q

What is the importance of exchange highlighted by?

A

International Trade when goods and services are bought and sold between different countries.

43
Q

What is demand?

A

Demand is defined as the quantities of a product that consumers are willing and able to buy at a specific price at a specific time.

44
Q

What can demand be described as?

A

The need for a product.
The ability to afford it.
The willingness to pay.

45
Q

What is the law of demand?

A

When the price of a product increases the demand for the product will decrease. When the price decreases the demand increases.

46
Q

What type of relationship is there between the price and the quantity of demand?

A

Inverse relationship.

47
Q

What are other factors that influence demand?

A

Change in taste and habits
Change in real income
Business cycle (economic cycle)
Tax
Volume of money in circulation
Changes in population.

48
Q

What is supply?

A

Quantity that a supplier is prepared to offer at a given price.

49
Q

What is the law of supply?

A

As the price of goods and services increases, the quantity of goods offered by suppliers will increase too.

50
Q

What factors of supply other than price?

A

Cost of production
Changes in the climate
Technological changes
Transport

51
Q

What is the equilibrium point

A

The price where the quantity of demand and quantity of supply is the exact same.

52
Q

What is SURPLUS?

A

When the quantity supplied is MORE than the quantity demand at a specific price.

53
Q

What is DEFICIT?

A

When the quantity supply is LESS than the quantity demanded at a specific price.

54
Q

What is the definition of price?

A

Price is the monetary value of a product that a consumer will be prepared to pay.

55
Q

What is a Trade Union?

A

Organisation which protects the right of workers who are members.

56
Q

What does trade unions in South Africa have a big influence on?

A

The constitution and Labour Laws that were once we had a democracy.

57
Q

What is the constitution?

A

Both private citizens and businesses fall under the constitution.

58
Q

What is LRA?

A

Labor Relations Act. The act covers issues relating freedom of association, trade unions, lockouts, strikes, collective bargaining and unfair labour practices.

59
Q

What are the roles and responsibilities of a trade Union?

A

Being a mouthpiece for workers rights
Collective Bargaining for its members
Improve conditions of employment
Negotiate on behalf of its members
Represent members in disciplinary issues
Offer advice to its members on labour legislation.

60
Q

What is COSATU?

A

The Congress of South African Trade Unions is an umbrella body to which some other trade Union bodies belong to.

61
Q

What is FEDUSA?

A

Federation of Unions of South Africa.

62
Q

What is collective bargaining?

A

Process of employees working together in order to negotiate with employers about issues.

63
Q

What is a strike?

A

Temporary collective refusal to work by employees to pressurize the employer to agree to the demands of the workers.

64
Q

What is a stay away?

A

A general strike in which people are told to stay away.

65
Q

What is a go slow?

A

When employees work at a much slower rate in which they are meeting their employers demands.

66
Q

What is the employer organization?

A

When employers get together in order to negotiate or bargain with their employees.

67
Q

What to employers need to obtain registration?

A

A proper constitution
The constitution must consist with the LRA
Union should not be formed to evade any law.

68
Q

What are some of the effects of trade unions on a business?

A
  • they can cause businesses to lose focus on their main aim or purpose as dealing with trade unions is timely
  • they can limit unfair labour practices
  • they can promote negotiations between employees and employers.
69
Q

How does the contribution of trade unions sustain growth and development?

A

Improving social living standards of individuals.

Business studies (5 decks)

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