Test 1 Review Flashcards
An accountant makes more money than a bookkeeper because the account has more ——.
human capital
Small business
independent from any corporation and has less than 500 employees
Corporations
firms that meet certain legal requirements and whose owners are separate from the firm
A —– is a form of business organization in which the owner maintains complete control over the business and is personally liable for any debts of the firm.
sole proprietorship
Ethics definitions
a set of moral principles, values, and behavior that demonstrates how we treat each other personally and how business is conducted
Ponzi schemes are legal
false
Economics definition
a social science that examines human behavior and decision-making in the presence of scarcity
absolute advantage
the ability to produce a specific product more efficiently than any other nation
competitive advantage
the ability to produce a specific product more efficiently than any other product
exporting
selling and shipping raw materials or products to other nations
importing
purchasing raw materials or products in other nations and bringing them into one’s own country
balance of trade
the total value of a nation’s exports minus the total value of imports over a period of time
a country’s balance of trade is negative when
a country imports more than it exports
trade deficit
a negative balance of trade
balance of payments
the total flow of money into a country minus the total flow of money out of that country over some period of time
licensing
a contractual agreement in which one firm permits another to produce and market its product and use its brand name in return for a royalty
letter of credit
issued by a bank to an importer stating that the bank will pay an amount of money to a stated beneficiary
bill of lading
document issued by a transport carrier to an exporter to prove that merchandise has been shipped
draft
issued by the exporter’s bank, ordering the importer’s bank to pay for the merchandise, guarantees payment once accepted by the importer’s bank
joint venture
a partnership formed to achieve a specific goal or to operate for a specific period of time
strategic alliance
a partnership formed to create competitive advantage on a worldwide basis
trading company
provides a link between buyers and sellers in different countries
countertrade
an international barter transaction
multinational enterprise
a firm that operates on a worldwide scale without ties to any specific nation or region
steps in entering international markets
1) identify exportable products
2) identify key foreign markets for the products
3) analyze how to sell in each priority market
4) set export prices and payment terms, methods, and techniques
import duty/tariff
a tax levied on a particular foreign product entering the country
dumping
the exportation of large quantities of a product at a price lower than that of the same product in the home market
nontariff barier
a nontax measure imposed by a government to favor domestic over foreign suppliers
import quota
a limit on the amount of a particular good that may be imported into a country during a given period of time
foreign-exchange control
a restriction on the amount of a particular foreign currency that can be purchased or sold
currency devaluation
the reduction of the value of a nation’s currency relative to the currencies of other countries
General Agreement on Tariffs and Trade (GATT)
international association of 160 nations dedicated to reducing or eliminating tariffs and other barriers to world trade
World Trade Organization (WTO)
powerful successor to GATT that incorporates trade in goods, services, and ideas
economic community
an organization of nations formed to promote the free movement of resources and products among its members and to create common economic policies
Export-Import Bank of the United States
an independent agency of the US government whose function is to assist in financing the exports of American firms
Recovery
uphill from trough
Prosperity
moving beyond old peak
Recession
a trough that lasts 2 consecutive quarters or longer
Depression
high unemployment, low productivity
Labor force participation rates
the percentage of the US adult population (16+) that are able to work and are either working or actively seeking work
Officially Unemployed
have looked in the last 2 weeks but have not found employment
Unemployment Rate
U/(U+E) = U/LF
Inflation
sustained increase in average prices in an economy and deflation
