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SOM Midterm Review > Review > Flashcards

Review Flashcards

1
Q

Aggregate Output

A

The total quantity of goods and services produced by an economic system during a given period. Primary measure of growth in the business cycle.

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2
Q

Balance of Trade

A

The economic value of all the products a country exports minus the economic value of its imported products. A positive balance of trade is when a country exports more than it imports, negative balance of trade is when they import more than they export.

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3
Q

Business

A

Organizations that provide goods and services that are then sold to earn profits.

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4
Q

Capital

A

The financial resources needed to operate a business

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5
Q

Capitalism

A

System that sanctions the private ownership of the factors of production and encourages entrepreneurship by offering profits as an incentive

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6
Q

Communism

A

A system in which the government owns and operates all factors of production.

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7
Q

Competition

A

When two or more businesses vie for the same resources or customer.

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8
Q

Consumer Price Index (CPI)

A

A measure of the prices of typical products purchased by consumers living in urban areas.

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9
Q

Demand

A

The willingness and ability of buyers to purchase a product (good or service)

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10
Q

Demand and Supply Schedule

A

Assessment of the relationships among different levels of demand and supply at different price levels.

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11
Q

Demand Curve

A

Shows how many products will be demanded (bought) at different prices.

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12
Q

Depression

A

A prolonged and deep recession

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13
Q

Domestic Business Environment

A

The environment in which a firm conducts its operations and derives it revenues.

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14
Q

Economic Environment

A

Relevant conditions that exist in the economic system in which a company operates.

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15
Q

Economic Indicator

A

A statistic that helps assess the performance of an economy.

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16
Q

Economic System

A

A nation’s system for allocating its resources among its citizens.

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17
Q

Entrepreneur

A

Business person who accepts both the risks and the opportunities involved in creating and operating a new business venture.

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18
Q

External Environment

A

Everything outside an organization’s boundaries that might affect it.

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19
Q

Factors of Production

A

Resources used in the production of goods and services labor, capital, entrepreneurs, physical resources and information resources.

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20
Q

Fiscal Policies

A

Policies used by a government regarding how it collects and spends revenue.

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21
Q

Global Business Environment

A

The international forces that affect a business.

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22
Q

Gross Domestic Product (GDP)

A

Total value of all goods and services produced within a given period by a national economy through domestic factors of production

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23
Q

GDP Per Capita

A

GDP divided by total population

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24
Q

Gross National Product (GNP)

A

Total value of all goods and services produced by a national economy within a given period regardless of where factors of production are located.

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25
Q

Inflation

A

Occurs when widespread price increases occur throughout an economic system.

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26
Q

Information Resources

A

Data and other information used by businesses.

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27
Q

Labor (Human Resources)

A

Physical and mental capabilities of people as they contribute to economic production.

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28
Q

Law of Demand

A

Principle that buyers will purchase (demand) more of a product as its price drops and less as its price increases.

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29
Q

Law of Supply

A

Principle that producers will offer (supply) more of a product for sale as its price rises and less as its price drops.

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30
Q

Market

A

Mechanism for exchange between buyers and sellers of a particular good or service.

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31
Q

Market Economy

A

Economy in which individuals control production and allocation decisions through supply and demand.

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32
Q

Market Price (equilibrium price)

A

Profit-maximizing price at which the quantity of goods demanded and the quantity of goods supplied are equal.

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33
Q

Mixed Market Economy

A

Economic system featuring characteristics of both planned and market economies.

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34
Q

Monetary Policies

A

Policies used by a govt to control the size of its money supply.

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35
Q

Monopolistic Competition

A

Market or industry characterized by numerous buyers and relatively numerous sellers trying to differentiate their product from those of competitors

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36
Q

Monopoly

A

Market or industry in which there is only one producer that can therefore set the prices of its products

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37
Q

National Debt

A

The amount of money the government owes its creditors

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38
Q

Natural Monopoly

A

Industry in which one company can most efficiently supply all needed goods and services.

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39
Q

Nominal GDP

A

GDP measured in current dollars or with all components valued at current prices

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40
Q

Oligopoly

A

Market or industry characterized by a handful of sellers with the power to influence the prices of their product.

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41
Q

Perfect Competition

A

Market or industry characterized by numerous small firms producing an identical product.

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42
Q

Physical Resources

A

Tangible items that organizations use in the conduct of their businesses.

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43
Q

Planned Economy

A

Economy that relies on a centralized govt to control all or most factors of production and to make all or most production and allocation decisions.

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44
Q

Political-Legal Environment

A

The relationship between business and government, usually in the form of government regulation of business.

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45
Q

Private Enterprise

A

Economic system that allows individuals to pursue their own interests without undue governmental restriction.

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46
Q

Privatization

A

Process of converting government enterprises into privately owned companies

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47
Q

Productivity

A

A measure of economic growth that compares how much a system produces with the resources needed to produce it.

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48
Q

Profits

A

Difference between a business’s revenue and its expenses.

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49
Q

Purchasing Power Parity

A

The principle that exchange rates are set so that the prices of simliar products in different countries are about the same.

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50
Q

Real GDP

A

GDP adjusted to account for changes in currency values and price changes

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51
Q

Recession

A

A period during which aggregate output, as measured by GDP, declines

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52
Q

Shortage

A

Situation in which quantity demanded exceeds quantity supplied

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53
Q

Socialism

A

Planned economic system in which the government owns and operates only selected major sources of production.

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54
Q

Sociocultural environment

A

The customs, mores, values, and demographic characteristics of the society in which an organization functions.

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55
Q

Stability

A

Condition in which the amount of money available in an economic system and the quantity of goods and services produced in it are growing at about the same rate.

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56
Q

Stabilization Policy

A

Government economic policy intended to smooth out fluctuations in output and unemployment and to stabilize prices.

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57
Q

Standard of Living

A

The total quantity and quality of goods and services people can purchase with the currency used in their economic system.

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58
Q

Supply

A

The willingness and ability of producers to offer a good or service for sale.

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59
Q

Supply Curve

A

Graph showing how many units of a product will be supplied at different prices.

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60
Q

Surplus

A

Situation in which quantity supplied exceeds quantity demanded.

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61
Q

Technological environment

A

All the ways by which firms create value for their constituents.

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62
Q

Unemployment

A

The level of joblessness among people actively seeking work in an economic system.

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63
Q

Accommodative Stance

A

Approach to social responsibility by which a company, if specially asked to do so, exceeds legal minimums in its commitments to groups and individuals in its social environment.

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64
Q

Business Ethics

A

Ethical or unethical behaviors by employees in the context of their jobs.

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65
Q

Collusion

A

illegal agreement between two or more companies to commit a wrongful act.

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66
Q

Consumerism

A

Form of social activism dedicated to protecting the rights of consumers in their dealings with businesses.

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67
Q

Corporate Social Audit

A

Systematic analysis of a firm’s overall attitude toward growth and the way it will manage it businesses or product lines.

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68
Q

Defensive Stance

A

Approach to social responsibility by which a company meets only minimum legal requirements in its commitments to groups and individuals.

69
Q

Ethical Behavior

A

Behavior conforming to generally accepted social norms concerning beneficial and harmful actions.

70
Q

Ethical Compliance

A

The extent to which the members of the organization follow basic ethical (and legal) standards of behavior.

71
Q

Ethics

A

Beliefs about what is right and wrong or good and bad in actions that affect others.

72
Q

Insider Trading

A

illegal practice of using special knowledge about a firm for profit or gain.

73
Q

Legal compliance

A

The extent to which the organization conforms to local, state, federal, and international laws.

74
Q

Lobbying

A

The use of persons or groups to formally represent an organization or group of organizations before political bodies.

75
Q

Managerial Ethics

A

Standards of behavior that guide individual managers in their work.

76
Q

Obstructionist Stance

A

Approach to social responsibility that involves doing as little as possible and may involve attempts to deny or cover up violations.

77
Q

Organizational Stakeholders

A

Those groups, individuals, and organizations that are directly affected by the practices of an organization and who therefore have a stake in its performance.

78
Q

Philanthropic Giving

A

The awarding of funds or gifts to charities or other worthy causes.

79
Q

Political Action Committees

A

Special organizations created to solicit money and then distribute it to political candidates.

80
Q

Proactive Stance

A

Approach to social responsibility by which a company actively seeks opportunities to contribute to the well-being of groups and individuals in its social environment.

81
Q

Regulation

A

The establishment of law and rules that dictate what organizations can and cannot do.

82
Q

Social Responsibility

A

The attempt of a business to balance its commitments to groups and individuals in its environment, including customers, other businesses, employees, investors, and local communities.

83
Q

Unethical Behavior

A

Behavior that does not conform to generally accepted social norms concerning beneficial and harmful actions,

84
Q

Whistle-Blower

A

Employee who detects and tries to put an end to a company’s unethical, illegal, or socially irresponsible actions by publicizing them.

85
Q

Acquisition

A

The purchase of one company by another.

86
Q

Board of Directors

A

Governing body of a corporation that reports to its shareholders and delegates power to run its day-to-day operations while remaining responsible for sustaining its assets.

87
Q

Business Plan

A

Document in which the entrepreneur summarizes his or her business strategy for the proposed new venture and how the strategy will be implemented.

88
Q

Chief Executive Officer (CEO)

A

Top manager who is responsible for the overall performance of a corporation.

89
Q

Closely Held (or private) Corporation

A

Corporation whose stock is held by only a few people and is not available for sale to the general public.

90
Q

Cooperative

A

Form of ownership in which a group of sole proprietorships or partnerships agree to work together for common benefits.

91
Q

Corporate Goverance

A

Roles of shareholders, directors, and other managers in corporate decision making and accountability.

92
Q

Corporation

A

Business that is legally considered an entity separate from its owners and is liable for its own debts; owners’ liability extends to the limits of their investments.

93
Q

Divestiture

A

Strategy whereby a firm sells one or more of its business units.

94
Q

Double Taxation

A

Situation in which taxes may be payable both by a corporation on its profits and by shareholders on dividend incomes.

95
Q

Employee Stock Ownership Plan (ESOP)

A

Arrangement in which a corporation holds its own stock in trust for its employees, who gradually receive ownership of the stock and control its voting rights.

96
Q

Entrepreneur

A

Business person who accepts both the risks and opportunities involved in creating/operating a new business venture.

97
Q

Entrepreneurship

A

The process of seeking business opportunities under conditions of risk.

98
Q

Established Market

A

One in which many firms compete according to relatively well-defined criteria.

99
Q

First-Mover Advantage

A

Any advantage that comes to a firm because it exploits an opportunity before any other firm does.

100
Q

Franchise

A

Arrangement in which a buyer (franchisee) purchases the right to sell the good or service of the seller (franchiser).

101
Q

General (or active) partner

A

Partner who actively manages a firm and who has unlimited liability for its debts

102
Q

General Partnership

A

Business with two or more owners who share in both the operation of the firm and the financial responsibilities for its debts.

103
Q

Institutional Investor

A

Large investor, such as a mutual fund or a pension fund, that purchases large blocks of corporate stock.

104
Q

Joint Venture

A

Strategic alliance in which the collaboration involves joint ownership of the new venture.

105
Q

Limited Liability

A

Legal principle holding investors liable for a firm’s debts only to the limits of their personal investments in it.

106
Q

Limited Liability Corporation (LLC)

A

Hybrid of a publicly held corporation and a partnership in which owners are taxed as partners but enjoy the benefits of limited liability.

107
Q

Limited partner

A

Partner who does not share in a firm’s management and is liable only to the limits of said partner’s investment.

108
Q

Limited Partnership

A

Type of partnership consisting of limited partners and a general partner.

109
Q

Master Limited Partnership

A

Form of ownership that sells shares to investors who receive profits and that pay taxes on income from profits.

110
Q

Merger

A

The union of two corporations to form a new corporation,

111
Q

Multinational (transnational) Corporation

A

Form of corporation spanning national boundaries

112
Q

Niche

A

A segment of a market that is not currently being exploited.

113
Q

Officers

A

Top management team of a corporation

114
Q

Professional Corporation

A

Form of ownership allowing professionals to take advantage of corporate benefits while granting them limited business liability and unlimited professional liability.

115
Q

Publicly Held (Public) Corporation

A

Corporation whose stock is widely held and available for sale to the general public.

116
Q

S Corporation

A

Hybrid of a closely held corporation and a partnership, organized and operated like a corporation but treated as a partnership for tax purposes.

117
Q

Small Business

A

Independently owned business that has relatively little influence in its market.

118
Q

Small Business Administration (SBA)

A

Government agency charged with assisting small businesses.

119
Q

Small Business Development Center (SBDC)

A

SBA program designed to consolidate information from various disciplines and make it available to small businesses.

120
Q

Small Business Investment Company (SBIC)

A

Govt regulated investment company that borrows money from the SBA to invest in or lend to a small business.

121
Q

Sole Proprietorship

A

Business owned and usually operated by one person who is responsible for all of its debts.

122
Q

Spin-off

A

Strategy of setting up one or more corporate units as new, independent corporations.

123
Q

Stockholder (or shareholder)

A

Owner of shares of stock in a corporation.

124
Q

Strategic Alliance

A

Arrangement (also called joint venture) in which a company finds a foreign partner to contribute approximately half of the resources needed to establish and operate a new business in the partner’s country.

125
Q

Tender Offer

A

Offer to buy shares made by a prospective buyer directly to target corporation’s shareholders, who then make individual decisions about whether to sell.

126
Q

Unlimited Liability

A

Legal principle holding owners responsible for paying off all debts of a business.

127
Q

Venture Capital Company

A

Group of small investors who invest money in companies with rapid growth potential

128
Q

Absolute Advantage

A

The ability to produce something more efficiently than any other country can.

129
Q

Association of Southeast Asian Nations (ASEAN)

A

Organization for economic, political, social, and cultural cooperation among Southeast Asian nations.

130
Q

Balance of Payments

A

Flow of all money into or out of a country.

131
Q

Balance of Trade

A

The economic value of all the products that a country exports minus the economic value of all products it imports.

132
Q

Branch Office

A

Foreign office set up by an international or multinational firm.

133
Q

Business Practice law

A

Law or regulation governing business practices in given countries.

134
Q

Cartel

A

Association of producers whose purpose is to control supply and prices.

135
Q

Comparative Advantage

A

The ability to produce some products more efficiently than others.

136
Q

Dumping

A

Practice of selling a product abroad for less than the cost of production.

137
Q

Embargo

A

Government order banning exportation or importation of a particular product or all products from a particular country.

138
Q

Euro

A

A common currency in the EU (excluding Denmark, Sweden, UK).

139
Q

European Union (EU)

A

Agreement among major European nations to eliminate or make uniform most trade barriers affecting group members.

140
Q

Exchange Rate

A

Rate at which the currency of one nation can be exchanged for the currency of another nation

141
Q

Export

A

Product made or grown domestically but shipped and sold abroad

142
Q

Exporter

A

Firm that distributes and sells products to one or more foreign countries

143
Q

Foreign Direct Investment (FDI)

A

Arrangement in which a firm buys or establishes tangible assets in another country.

144
Q

General Agreement on Tariffs and Trade (GATT)

A

International trade agreement to encourage the multilateral reduction or elimination of trade barriers.

145
Q

Globalization

A

Process by which the global economy is becoming a single interdependent system.

146
Q

Goal Orientation

A

The manner in which people are motivated to work towards different types of goals.

147
Q

Import

A

Product made abroad but sold domestically.

148
Q

Importer

A

Firm that buys products in foreign markets and then imports them for resale in his home country.

149
Q

Independent Agent

A

Foreign individual or organization that agrees to represent an exporter’s interests

150
Q

International Firm

A

Firm that conducts a significant portion of its business in foreign countries.

151
Q

Licensing Arrangement

A

Arrangement in which firms choose foreign individuals or organizations to manufacture or market their products in another country.

152
Q

Local Content Law

A

Law requiring that products sold in a particular country be at least partly made there.

153
Q

Multinational Firm

A

Firm that designs, produces and markets products in multiple nations.

154
Q

National Competitive Advantage

A

International competitive advantage stemming from a combination of factor conditions, demand conditions, related and supporting industries, and firm strategies, structures, and rivalries.

155
Q

North American Free Trade Agreement (NAFTA)

A

Agreement to gradually eliminate tariffs and other trade barriers among the United States, Canada, and Mexico.

156
Q

Offshoring

A

The practice of outsourcing to other countries

157
Q

Outsourcing

A

The practice of paying suppliers and distributors to perform certain business processes or to provided needed materials or services.

158
Q

Power Orientation

A

The beliefs that people in a culture hold about the appropriateness of power and authority differences in hierarchies such as business organizations.

159
Q

Protectionism

A

Practice of protecting domestic against foreign competition.

160
Q

Quota

A

Restriction on the number of products of a certain type that can be imported into a country.

161
Q

Social Orientation

A

A person’s beliefs about the relative importance of the individual versus groups to which that person belongs.

162
Q

Subsidy

A

govt payment to help a domestic business compete with foreign firms.

163
Q

Tariff

A

tax levied on imported products

164
Q

Time Orientation

A

The extent to which members of a culture a long-term versus a short-term outlook on work, life, and other elements of society.

165
Q

Trade Defecit

A

Situation in which a country’s imports exceed its exports

166
Q

Trade Surplus

A

Situation in which a country’s exports exceed its imports

167
Q

Uncertainty Orientation

A

The feeling individuals have regarding uncertain and ambiguous situations

168
Q

World Trade Organization (WTO)

A

Organization through which member nations negotiate trading agreements and resolve disputes about trade policies and practices

SOM Midterm Review (1 decks)

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