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Intro to Business > Terminology > Flashcards

Terminology Flashcards

1
Q

Value

A

The relationship between the price of a good/service and the benefits that it offers.

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2
Q

Business

A

Any organization that provides goods/services in effort to earn a profit.

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3
Q

Profit

A

The money a business earns in sales (revenue) minus expenses.
Revenue - expenses = Profit (or loss)

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4
Q

Loss

A

When a business incurs expenses greater than its revenue.

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5
Q

Entrepreneurs

A

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

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6
Q

Standard of Living

A

The quality and quantity of goods and services available to a population.

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7
Q

Quality of Life

A

The overall sense of well-being experienced by either an individual or a group.

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8
Q

Nonprofits

A

Business-like establishments (that employ people and produce goods and services) with the fundamental goal of contributing to the community rather than generating financial gain.

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9
Q

Factors of Production

A

Four fundamental elements that businesses need to achieve their objections.

  • Natural resources
  • Capital
  • Human Resources
  • Entrepreneurship
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10
Q

Business Environment

A

The setting in which business operates.

Five key components:
Economic environment,
competitive environment, technological environment, social environment, and global environment.

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11
Q

Speed-to-Market

A

The rate at which a new product moves from conception to commercialization.

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12
Q

Business Technology

A

Any tools that businesses can use to become more efficient and effective.
(especially: computers, telecommunications, and other digital products)

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13
Q

World Wide Web

A

The service that allows computer users to easily access and share information on the Internet.

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14
Q

E-commerce

A

Business transactions conducted online, typically via the Internet.

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15
Q

Demographics

A

The measurable characteristics of a population. Demographic factors include population size and density, as well as specific traits such as age, gender, and race.

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16
Q

Free Trade

A

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

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17
Q

General Agreement on Tariffs and Trade (GATT)

A

An international trade agreement that has taken bold steps to lower tariffs and promote free trade worldwide.

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18
Q

Economy

A

A financial and social system of how resources flow through society, from production, to distribution, to consumption.

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19
Q

Economics

A

The study of the choices that people, companies, and governments make in allocating society’s resources.

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20
Q

Macroeconomics

A

The study of a country’s overall economic dynamics. (unemployment rate, the gross domestic product, and taxation policies)

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21
Q

Microeconomics

A

The study of smaller economic units. (individual consumers, families, and individual businesses)

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22
Q

Fiscal Policy

A

Government efforts to influence the economy through taxation and spending.

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23
Q

Budget Surplus

A

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

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24
Q

Budget Deficit

A

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

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25
Q

Federal Debt

A

The sum of all the money that the federal government has borrowed over the years and not yet repaid.

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26
Q

Monetary Policy

A

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

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27
Q

Commercial Banks

A

Privately owned financial institutions that accept demand deposits and make loans and provide other services for the public.

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28
Q

Money Supply

A

The total amount of money within the overall economy.

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29
Q

Money

A

Anything generally accepted as a medium of exchange, a measure of value, or a means of payment.

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30
Q

M1 Money Supply

A

Includes all currency plus checking accounts and traveler’s checks.

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31
Q

M2 Money Supply

A

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

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32
Q

Open Market Operations

A

The Federal Reserve function of buying and selling government securities. (treasury bonds, notes, and bills)

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33
Q

Federal Deposit Insurance Corporation (FDIC)

A

A federal agency that insures deposits in banks and thrift institutions for up to $250,000 per customer, per bank.

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34
Q

Discount Rate

A

The rate of interest that the Federal Reserve charges when it loans funds to banks.

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35
Q

Reserve Requirement

A

A rule set by the Fed, which specifies the minimum amount of reserves (or funds) a bank must hold, expressed as a percentage of the bank’s deposits.

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36
Q

Economic System

A

A structure for allocating limited resources.

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37
Q

Capitalism

A

An economic system based on private ownership, economic freedom, and fair competition. Also known as the private enterprise or free market system.

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38
Q

Pure Competition

A

A market structure with many competitors selling virtually identical products. Barriers to entry are quite low.

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39
Q

Monopolistic Competition

A

A market structure with many competitors selling differentiated products. Barriers to entry are low.

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40
Q

Fundamental Rights of Capitalism

A
  • The right to own a business and keep after-tax profits.
  • The right to private property.
  • The right to free choice.
  • The right to fair competition.
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41
Q

Oligopoly

A

A market structure with only a handful of competitors selling products that can be similar or different. Barriers to entry are typically high.

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42
Q

Monopoly

A

A market structure with one producer completely dominating the industry, leaving no room for any significant competitors. Barriers to entry tend to be virtually insurmountable.

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43
Q

Natural Monopoly

A

A market structure with one company as the supplier of a product because the nature of that product makes a single supplier more efficient than multiple, competing ones. Most natural monopolies are government sanctioned and regulated.

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44
Q

Supply

A

The quantity of products that producers are willing to offer for sale at different market prices.

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45
Q

Supply Curve

A

The graphed relationship between price and quantity from a supplier standpoint.

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46
Q

Demand

A

The quantity of products that consumers are willing to buy at different market prices.

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47
Q

Demand Curve

A

The graphed relationship between price and quantity from a customer demand standpoint.

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48
Q

Equilibrium Price

A

The price associated with the point at which the quantity demanded of a product equals the quantity supplied.

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49
Q

Socialism

A

An economic system based on the principle that the government should own and operate key enterprises that directly affect public welfare.

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50
Q

Communism

A

An economic and political system that calls for public ownership of virtually all enterprises, under the direction of a strong central government.

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51
Q

Mixed Economics

A

Economies that embody elements of both planned and market-based economic systems.

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52
Q

Privatization

A

The process of converting government owned businesses to private ownership.

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53
Q

Gross Product (GDP)

A

The total value of all final goods and services produced within a nation’s physical boundaries over a given period of time.

54
Q

Unemployment Rate

A

The percentage of people in the labor force over 16 who do not have jobs and are actively seeking employment.

55
Q

Business Cycle

A

The periodic contraction and expansion that occur over time in virtually every economy.

56
Q

Contraction

A

A period of economic downturn, marked by rising unemployment and falling business production.

57
Q

Recession

A

An economic downturn marked by a decrease in the GDP for two consecutive quarters.

58
Q

Depression

A

An especially deep and long-lasting recession.

59
Q

Recovery

A

A period of rising economic growth and employment.

60
Q

Expansion

A

A period of robust economic growth and high employment.

61
Q

Inflation

A

A period of rising average prices across the economy.

62
Q

Hyperinflation

A

An average monthly inflation rate of more than 50 percent.

63
Q

Disinflation

A

A period of slowing average price increases across the economy.

64
Q

Deflation

A

A period of falling average prices across the economy.

65
Q

Consumer Price Index (CPI)

A

A measure of inflation that evaluates the change in the weighted-average price of goods and services that the average consumer buys each month.

66
Q

Producer Price Index (PPI)

A

A measure of inflation that evaluates the change over time in the weighted-average wholesale prices.

67
Q

Productivity

A

The basic relationship between the production of goods and services (output) and the resources needed to produce them (input) calculated via the following equation: output/input=productivity

68
Q

Opportunity Cost

A

The opportunity of giving up the second-best choice when making a decision.

69
Q

Absolute Advantage

A

The benefit a country has in a given industry when it can produce more of a product than other nations using the same amount of resources.

70
Q

Comparative Advantage

A

The benefit a country has in a given industry if it can make products at a lower opportunity cost than other countries.

71
Q

Balance of Trade

A

A basic measure of the difference in value between a nation’s exports and imports, including both goods and services.

72
Q

Trade Surplus

A

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

73
Q

Trade Defecit

A

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

74
Q

Balance of Payments

A

A measure of the total flow of money into or out of a country.

75
Q

Balance of Payments Surplus

A

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

76
Q

Balance of Payments Deficit

A

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

77
Q

Exchange Rates

A

A measurement of the value of one nation’s currency relative to the currency of other nations.

78
Q

Countertrade

A

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

79
Q

Foreign Outsourcing

A

Also contract manufacturing. Contracting with foreign suppliers to produce products, usually at a fraction of the cost of domestic production.

80
Q

Importing

A

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

81
Q

Exporting

A

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

82
Q

Foreign Licensing

A

Authority granted by a domestic firm to a foreign firm for the rights to produce and market its product or to use its trademark/patent rights in a defined geographical area.

83
Q

Foreign Franchising

A

A specialized type of foreign licensing in which a firm expands by offering businesses in other countries the right to produce and market its products according to specific operating requirements.

84
Q

Direct Investment

A

Also Foreign Direct Investment. When firms either acquire foreign firms or develop new facilities from the ground up in foreign countries.

85
Q

Joint Ventures

A

When two or more companies join forces—sharing resources, risks, and profits, but not actually merging companies—to pursue specific opportunities.

86
Q

Partnership

A

A voluntary agreement under which two or more people act as co-workers of a business for profit.

87
Q

Strategic Alliance

A

An agreement between two or more firms to jointly pursue a specific opportunity without actually merging their businesses. Strategic alliances typically involve less formal, less encompassing agreements than partnerships.

88
Q

Sociocultural Differences

A

Differences among cultures in language, attitudes, and values.

89
Q

Infrastructure

A

A country’s physical facilities that support economic activity.

90
Q

Protectionism

A

National policies designed to restrict international trade, usually with the goal of protecting domestic businesses.

91
Q

Tariffs

A

Taxes levied against imports.

92
Q

Quotas

A

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

93
Q

Voluntary Export Restraints (VERs)

A

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

94
Q

Embargo

A

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

95
Q

World Trade Organization (WTO)

A

A permanent global institution to promote international trade and to settle international trade disputes.

96
Q

World Bank

A

An international cooperative of 187 member countries, working together to reduce poverty in the developing world.

97
Q

International Monetary Fund (IMF)

A

An international organization of 187 member nations that promotes international economic cooperation and stable growth.

98
Q

Trading Bloc

A

A group of countries that have reduced or even eliminated tariffs, allowing for the free flow of goods among the member nations.

99
Q

Common Market

A

A group of countries that have eliminated tariffs and harmonized trading rules to facilitate the free flow of goods among the member nations.

100
Q

North American Free Trade Agreement (NAFTA)

A

The treaty among the United States, Mexico, and Canada that eliminated trade barriers and investment restrictions over a fifteen-year period starting in 1994.

101
Q

European Union (EU)

A

The world’s largest common market, composed of twenty-seven European nations.

102
Q

Ethics

A

A set of beliefs about right and wrong, good and bad.

103
Q

Universal Ethical Standards

A

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

104
Q

Business Ethics

A

The application of right and wrong, good and bad, in a business setting.

105
Q

Ethical Dilemma

A

A decision that involves a conflict of values; every potential course of action has some significant negative consequences.

106
Q

Code of Ethics

A

A formal, written document that defines the ethical standards of an organization and gives employees the information they need to make ethical decisions across a range of situations.

107
Q

Whistle-Blowers

A

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

108
Q

Social Responsibility

A

The obligation of a business to contribute to society.

109
Q

Stakeholders

A

Any groups that have a stake- or a personal interest- in the performance and actions of an organization.

110
Q

Consumerism

A

A social movement that focuses on four key consumer rights:

  1. The right to be safe.
  2. The right to be informed.
  3. The right to choose.
  4. The right to be heard.
111
Q

Planned Obsolescence

A

That strategy of deliberately designing products to fail in order to shorten the time between purchases.

112
Q

Sarbanes-Oxley Act

A

Federal legislation passed in 2002 that sets higher ethical standards for public corporations and accounting firms. Key provisions limit conflict-of-interest issues and require financial officers and CEOs to certify the validity of their financial statements.

113
Q

Corporate Philanthropy

A

All business donations to nonprofit groups, including money, products, and employee time.

114
Q

Cause-Related Marketing

A

Marketing partnerships between businesses and nonprofit organizations, designed to spike sales for the company and raise money for the nonprofit.

115
Q

Corporate Responsibility

A

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

116
Q

Sustainable Development

A

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

117
Q

Carbon Footprint

A

Refers to the amount of harmful greenhouse gases that a firm emits throughout its operations, both directly and indirectly.

118
Q

Green Marketing

A

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

119
Q

Social Audit

A

A systematic evaluation of how well a firm is meeting its ethics and social responsibility goals.

120
Q

Communication

A

The transmission of information between a sender and a recipient.

121
Q

Noise

A

Any interference that causes the message you send to be different from the message your audience understands.

122
Q

Communication Barriers

A

Obstacles to effective communication, typically defined in terms of physical, language, body language, cultural, perceptual, and organizational barriers.

123
Q

Intercultural Communication

A

Communication among people with differing cultural backgrounds.

124
Q

Nonverbal Communication

A

Communication that does not use words. Common forms of nonverbal communication include gestures, posture, facial expressions, tone of voice, and eye contact.

125
Q

Active Listening

A

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

126
Q

Communication Channels

A

The various ways in which a message can be sent, ranging from one-on-one in-person meetings to Internet message boards.

127
Q

Bias

A

A preconception about members of a particular group. Common forms of bias include gender bias; age bias; and race, ethnicity, or nationality bias.

128
Q

Active Voice

A

Sentence construction in which the subject performs the action expressed by the verb (e.g., My sister wrote the paper). The active voice works better for the vast majority of business communication.

129
Q

Passive Voice

A

Sentence construction in which the subject does not do the action expressed by the verb; rather the subject is acted upon (e.g., The paper was written by my sister). The passive voice tends to be less effective for business communication.

130
Q

Dynamic Delivery

A

Vibrant, compelling presentation delivery style that grabs and holds the attention of the audience.

Intro to Business (2 decks)

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