Key Words Y12 Flashcards
What is GDP?
Gross Domestic Product.
The total value of output produced in an economy in a year.
What is economic growth?
The annual percentage change in GDP.
What is infrastructure?
The basic physical and organisational structures and facilities (eg buildings, roads, power supplies) needed for the operation of a society or enterprise.
What is standard of living?
The amount of goods and services a person can buy with their income in a year.
What is inflation?
Persistent general tendency of prices in the economy to rise.
Consumer price index
A measure that examined the weighted average of prices of a basket of consumer goods/services.
Exchange rate
The value of one currency in terms of another.
Import
A sale leading to money going out of the UK
Export
A sale leading to money going into the UK
Interest rates
The reward for saving and the cost of borrowing expressed as a percentage of the money saved or borrowed.
Adding value
An improvement or addition to something that makes it worth more.
Elasticity
The sensitivity of a products demand due to a change in price.
Balance of payments/trade
Difference between the value of exports and imports.
Market growth
The value of the market increases.
Ethics
When a business is either morally right or morally wrong.
Eurozone
The currency of the Euro that is used in many countries within the EU.
Substitute
A product that can be used instead of another.
Acquisition
Where control of another company is achieved by buying the majority of its shares (50%).
Collusion
When rival companies cooperate for their mutual benefit.
The EU single market
Refers to the EU as one territory without any internal borders or other regulatory obstacles to the free movement of goods and services.
Market dominance
A measure of market share compared to competitors.
Monopolistic competition
A market structure in which many companies sell products different from one another.
Indirect taxes
These are taxes on expenditure.
Paid to tax Authorities not by consumer but indirectly by suppliers of goods/services.
Direct taxes
These are taxes on income and profits, paid directly by bearer (person that carries something) to tax authorities.
Income tax
Tax taken out of a persons income.
National insurance
This is taken as a contribution towards the state pension and treatment under the NHS.
Subsidy
Payment by the gov to suppliers. The effect of a subsidy is to increase supply of particular goods.
Monetary policy
Control of the level of demand in the economy using the rate of interest.
Fiscal policy
Economic policy controlled by the government through taxation and public spending.
Multiplier effect
Effective changes in economic activity in one sector on other sectors.
If one business experience a rise or fall in demand this leads to a knock-on effect on the business of supplying it.
Supply side policies
Aim to improve the economy’s overall productive capacity.
Business cycle
The observed pattern of increases and decreases of economic growth (measured by a % change in GDP) over long term.
Globalisation
The world coming together to trade in each other’s markets.
Multinationals
A business that has activities or operations in more than one country.
Global strategy
Companies that are keen to operate on a global scale must consider how to build a competitive global advantage.
Brand
A distinctive product offering created by the use of a logo, symbol, design etc.
Global brand
Brands that are recognised throughout much of the world.
Demographics
The characteristics of human populations and population groups.
Sustainability
Negative impacts from economic systems and production on the earth and its environment.
The 4 freedoms
Movement of goods, services, capital and people.
Barriers to entry and exit
Barriers to entry - the factors that could prevent a firm from entering and competing in a market.
Barriers to exit - the factors that could prevent a firm from leaving a market.
Competitive market
A market in which there are a large number of sellers.
Market equilibrium
A situation in which quantity demanded equals quantity supplied.
Market power
The ability of a firm to influence or control the terms and conditions on which goods are bought/sold.
Mark up
The difference between the cost of producing a product and the price it’s sold at.
Monopoly
A market in which there are many buyers but only one seller.
Quotas
The quantity of a good that can be imported into a country in a given period of time.
Tariffs
A duty (tax) paid on imports.
Sustainability
Negative impacts from economic systems and production on the earth and it’s environment.
How is inflation calculated?
(Price of basket of goods in new year-old year)
——————————————
(Price of basket of goods in old year)
- 100
Trading bloc
A group of countries that protect themselves from imports from non-members and promote trade activities.
Emerging markets
A term used to describe a country that is achieving rapid growth and industrialisation.
International trade
This refers to selling across borders, ie the exchange of goods and services between countries.
Why do countries trade internationally?
Variety, to grow, to specialise in what it does best, to reduce cost, to avoid conflict.
Globalisation
The world coming together to trade in each other’s markets.
National Minimum wage
The minimum pay per hour workers of school leaving age are entitled to by law.
National Living wage
A new minimum wage rate for those 25 and over.
Contract law
Sets out the basic framework of rights and obligations.
E.g. a pizza company promised to deliver 1000 pizzas to Aldi. If the ingredients fail to deliver, this would lead to not delivering for Aldi. Pizza company would be able to sue supplier.
Weight and Measures Act
An offence to give short measures or an incorrect indication of the amount of a product on sale.
Data Protection Act
Controls how personal information on groups such as employees is stored and used by a business.
The Health and Safety Act
To take account of new issues and hazards, such as repetitive strain injury.
Trademark
A company can register a trademark for its business name, slogans, logos and other items that brand the company.
Complying with legislation
To not break laws which businesses have to follow.
Stamp duty
The tax placed on legal documents, usually in the transfer of assets or property. It controls inflation.
Corporation tax
A tax on business profits. The tax is payable from all taxable profits of any company that is based in the UK, no matter where the profit was generated. The rate is 19%.
The consumer rights act
Principles:
1) Goods must fit their description
2) Goods must be of satisfactory quality
3) Goods must fit for their purpose
Digital revolution
The digital revolution encompasses the shift from analog (clock) and mechanical (machinery) technology to digital technology.
Information Age
A time when large amounts of information is widely available.
HRM - Human Resource Management
In other words, HRM is about how people are managed by a business in order to meet the strategic objectives of the business.
Organisational Chart
This is a diagram that shows the hierarchy in a business, usually from top to bottom in terms of seniority.
Span of Control
The number of employees (or subordinates) for who a manager is responsible for.
Chain of Command
The chain of command is concerned with the way in which responsibility for employees is organised within a business.
Levels of hierarchy/layers
This refers to the number of levels or layers in a business organisation.
Line relationships
The vertical relationship (in the organisational hierarchy) between managers and subordinates.
Staff relationships
The horizontal relationship between a manager and another organisational member to/from whom the manager gives or receives information or advice.
Subordinate
Is someone who works for someone else, on an organisational chart.
Delayering
A process of reducing the number of levels or layers in an organisational structure.
Delegation
Where a responsibility for carrying out a task is passed onto somebody else.
Empowerment
Involves giving people greater control/power over their working lives. Eg making decisions and plan their work.
Centralised structure
The decisions are made right at the top, authority lies with those at the top.
Decentralised structure
The decision is spread out to include more junior managers in the hierarchy.
Organisation by function (system)
By departments. The business is arranged into specialist/functional areas. This means that each function has some input into the output of the business’ product (s).
Organisation by product
The business is organised according to the different products made.
Matrix structure
Individuals work across teams and projects as well as within their own department.
Appraisal
A formal assessment of an employees performance.
Managerial appraisal
A method of appraisal where a manager examines and evaluates an employees performance.
Self assessment
Employees assess their own performance, often using a tick sheet. This can be used as a stand alone method or in advance of a managerial appraisal.
360 Degree Appraisal
This involves an employee receiving feedback from several people in organisation. This is more appropriate for staff who work in large businesses within multiple teams.
Peer assessment
This is when the appraisal is carried out by a work colleague.
Labour turnover
Concerned with measuring the number of employees who have left the business.
Absenteeism
Employees are absent off work, with minor ailments, eg a headache.
Workforce productivity
A measure of output per employee in a period of time.
Recruitment
The process of bringing new employees into the business.
Job description
Document that describes the duties of a worker.
Person specification
A profile of the type of person needed for the job, eg their skills.
Internal recruitment
When a business looks to fill vacancy from within its existing workforce.
External recruitment
When the business looks to fill vacancy from any suitable applicant outside the business.
Selection
The process of deciding which applicant for a job a business should accept.
CV
A document that the applicant designs providing details such as educational history.
Application form
A standard business document which is prepared with questions from employer.
Letter of application
Also known as a cover letter, is a document sent with a CV/application form to provide extra information.
Work/job trial
A period of trying out a potential employee. The staff will be able to see if they can handle their job responsibilities.
Reference
A statement from a previous/current employer about the sustainability of the applicant for the job.
Collective bargaining
The negotiation of wages and other conditions of employment by an organised body of employees. For example about a topic like promotions.
