The Nature Of Business (Chapter 1) Flashcards
What is Bartering?
The exchange of one good for another good with the use of money
Features/characteristics of Money
Acceptable~everyone willing to accept
Durable~ pass from hand to hand using over again and again
Portable~ easily carried
Divisibility~divided easily into smaller fractions
Homogenous~same size, weight, texture
Functions of money
Medium of exchange~accept it in exchange for goods and services
Unit of account~the worth of good or service is measured in money(which set the price for the item)
Store of value~used and saved for the future
Means of Deferred payments~used to pay for good bought on credit
Disadvantage/Limitations of Bartering
Double confidence of wants
Rate of exchange (acceptable, right quantity)
Store of value
Store of wealth
Instruments of exchange
Credit card, Bill of exchange, Bank notes, Debit card, Cheques, Electronic transfer, Internet banking, tele banking
What is an Economy ?
is when a nation makes its economic choices about the use of it’s resources to produce and distribute goods and services
What are the factors of production?
Land
Labour
Capital
Enterprise/Entreprenship
The types of Economy
Planned
Free market
Mixed
What is a Command/Planned economy ?
Is where the government makes it economic decision
Eg~ China, Cuba and North Korea
What is a Market economy?
Is where the resources are owned by private individuals these individuals made the economic decisions
Eg~ Canada, England, Japan and America
What are the Function of a Business?
~To maximize profits
~To create employment
~To produce goods and services
~To satisfy the needs and wants of customers
What are the Functional Areas of a Business?
Production
Marketing
Finance
Administration
Human Resources
Research and Development
Production is the
Changing of natural resources into a product
Finance is where the
They record transaction, keeping track of the money flow
Administration deals with
forms, legal paperwork, Producing documents for the workforce
