Topic 1 (Ch. 1-2) Flashcards
Define business
Any activity that seeks to provide goods and services to others, while operating at a profit
Define goods
Tangible products, such as computers, food, clothing, cars and appliances
Define services
Intangible products, such as education, healthcare, insurance, recreation, etc.
Define entrepreneur
A person who risks time and money to start and manage a business
Define revenue
The total amount of money, a business takes, and during a given period by selling goods and services
Define profit
The amount of money a business earns above and beyond what it spends for salaries and other expenses
Standard of living
The amount of goods and services people can buy with the money they have
Quality of life
The general well-being of a society in terms of its political freedom, natural environment, education, healthcare, safety, etc.
Define stakeholders
All of the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address
Factors of production
The resources used to create wealth: land, labor, capital, entrepreneurship, and knowledge
Examples of business environment
Economic and legal environment, technological environment, competitive environment, the social environment, and the global business environment
Define productivity
The amount of output you generate given the amount of input
Define e-commerce
The buying and selling of goods over the Internet
Define empowerment
Giving Frontline workers a responsibility, authority, freedom, training, and equipment. They need to respond quickly to customer requests
Define demography
The statistical study of the human population with regard to size density, and other characteristics, such as age, race, gender, and income
Define economics
The study of how society chooses to employ resources to produce goods and services, and distribute them for consumption among various competing groups and individuals
Macro economics
The part of economics study that looks at the operation of a nations economy as a whole
Micro economics
The part of economic study that looks at the behavior of people and organizations in particular markets
Invisible hand
A phrase coined by Adam Smith to describe the process that turns self-directed getting into social and economic benefits for all
Define capitalism
An economic system, in which all are most of the factors of production and distribution are privately owned and operated for profit
State capitalism
A combination of freer markets, and some government control
Define supply
The quantity of products that manufactures or owners are willing to sell a different prices at a specific time
Demand
The quantity of products that people are willing to buy
Market price
The price determined by supply and demand
Define perfect competition
The degree of competition in which there are many sellers in America, and none is large enough to dictate the price of a product
Monopolistic competition
The degree of competition in which a large number of sellers produce very similar products. That buyer’s nevertheless perceive is different.
Oligopoly
A degree of competition, which just a few sellers dominate the market
Monopoly
A degree of competition, which only one seller controls the total supply of a product or service and sets the price
Define Socialism
An economic system, based on the premise that some, if not most basic businesses should be owned by the government, so that profits can be more evenly distributed among the people
Brain drain
The last of the best and brightest people to other countries
Define communism
An economic and political system, in which the government makes almost all economic decisions, and owns almost all the major factors of production
Free market economies
Economic systems, in which the market marginally determines what goods and services get produced who gets them, and how the economy grows (capitalism)
Command economies
Economic systems, in which the government largely decides what goods and services will be produced who will get them, and how the economy will grow (socialism and communism)
Mixed economies
Systems in which some allocation of resources is made by the market and some by the government
Gross domestic product
The total value of final goods and services produced in a country in a given year
Gross output
A measure of total sales volume at all stages of production
Unemployment rate
The number of civilians, at least 16 years old, who are unemployed and tried to find a job within the prior four weeks
Four types of unemployment
Frictional unemployment, structural unemployment, cyclical, unemployment, and seasonal unemployment
Inflation
A general rise in the process of goods and services over time
Disinflation
A situation in which price increases are slowing
Deflation
A situation in which prices are declining
Stagflation
A situation when the economy is slowing, but prices are going up anyhow
Consumer price index (CPI)
Monthly statistics that measure the pace of inflation or deflation
Core inflation
CPI minus food and energy costs
Producer price index (PPI)
Index that measures the change in prices at the wholesale level
Recession
Two or more consecutive quarters of decline in the GDP
Depression
A severe recession usually with deflation
Fiscal policy
The federal government efforts to keep the economy stable by increasing or decreasing taxes, are government spending
Keynesian economic theory
The theory that a government policy of increasing spending and cutting taxes, could stimulate the economy in a recession
Monetary policy
The management of the money supply in interest rates by the federal reserve bank
