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pob study guide
| Term | Definition |
|---|---|
| Mixed economy | Combines elements of the command and market economies |
| Entrepreneurial resources | The initiative to combine natural, human, and capital resources |
| Opportunity cost | Value of the next-best alternative that is forgone to produce or obtain another product |
| Competitors | Businesses that offer the same goods to the same customers |
| Economic decision-making | Process of choosing which needs or wants will be satisfied |
| Economic resources | Means from which goods and services are produced |
| Private property | Right to purchase, use, and discard of things of value |
| Services | Activities that can be consumed at the time of purchase to satisfy needs and wants |
| Scarcity | Condition that exists when wants or needs exceed resources available |
| Economics | Study of the decisions made for production, distribution, and consumption of goods and services to satisfy needs and wants |
| Needs | Necessities required for living |
| Consumer | Necessities required for living Buys and uses the goods and services |
| Capital resources | Goods and money used in the production of goods and services |
| Natural resources | Raw materials supplied by nature |
| Human resources | People using efforts, knowledge, and skills at work to produce goods and services |
| Free enterprise | Economic system which freedom to consume and produce goods and services exists |
| Traditional economy | Economic system in which decisions are based on customs and centered on family |
| Goods | Items purchased to satisfy needs and wants |
| Profit | Money left after selling goods and services and costs of operating a business have been paid |
| Wants | Goods that are purchased to add comfort or pleasure to life |
| Marketplace | Anywhere goods and services exchange hands Process of giving up something for gaining something else |
| Market economy | Goods and services are owned and controlled by the people |
| Freedom of choice | Opportunity to make choices of goods and services and accept consequences of decisions |
| Command economy | Economics system in which the government owns resources and dictates what is produced |
| Market price | The point where supply and demand are equal |
| Deflation | A decrease in the general price level |
| Business Cycle | The movement of an economy from one condition to another and back again |
| Capital Project Spending | Spending by businesses for items such as land, buildings, and equipment |
| Budget Surplus | Government spends less than it takes in |
| Depression | A phase marked by a long period of high A unemployment, weak consumer sales, and business failures |
| Bond | Represents debt for an organization |
| Personal Income | Salaries and wages as well as investment income and government payments to individuals |
| GDP Per Capita | The Gross Domestic product (GDP) divided by the total population of a country |
| Productivity | Production output in relation to a unit of input, such as a worker |
| Recovery | The phase in which unemployment decreases, demand for goods and services increases, and GDP begins to rise |
| Inflation | An increase in the general price level |
| Stock | Represents ownership in a corporation |
| Budget Deficit | Government spending more than it takes in |
| Unemployment Rate | The portion of people in the labor force who are not working |
| Retail Sales | The sales of durable and non durable goods bought by consumers |
| Prosperity | A period in which unemployment is low, businesses produce many goods and services, and wages are good |
| Price Index | A number that compares prices in one year with some earlier base year |
| Recession | A period in which demand, production, and GDP growth decreases and unemployment begins to rise |
| National Debt | The total amount owed by the federal government |
| Gross Domestic Product | The total value of all final goods and services produced in a country in one year (GDP) |
| Domestic Business | Making, buying and selling of goods and services within a country |
| International Business | business activities needed for creating, shipping, and selling goods and services across national borders. Also referred to as "foreign" trade or "world trade |
| Absolute Advantage | exists when a country can produce a good or service at a lower cost than other countries |
| Comparative Advantage | a situation in which a country specializes in the production of a good or service at which it is relatively more efficient |
| Imports | items bought from other countries |
| Exports | Goods and services sold to other countries |
| Foreign Debt | the amount a country owes to other countries |
| Balance of Payments | The difference in the amount of money that comes into a country and the amount that goes out of it |
| Positive or Favorable Balance of Payment | occurs when a nation receives more money in a year than it pays out |
| Negative or Unfavorable Balance of Payment | occurs when a nation pays out more money than it takes in in a year |
| Exchange Rate | the value of a currency in one country compared to the value of another |
| Foreign Exchange Market | Banks buying and selling different currencies |
| Culture | the accepted behaviors, customs, and values of a society |
| Infrastructure | a nation's transportation, communications, and utility systems |
| Trade Barriers | Restrictions to free trade created by governments |
| Formal Trade Barriers | Political actions such as quotas, tariffs and embargoes |
| Informal Trade Barriers | Restrictions to trade based on culture, traditions, and religion |
| Quota | Limits set by governments on quantities of a product that may be imported or exported |
| Tariff | a tax that a government places on certain imported products |
| embargo | when the government stops the import or export of a product completely |
| Free Trade Zone | a selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing. |
| Free Trade Agreement | When member countries agree to remove duties and trade barriers on products traded among them |
| common market | companies are free to invest in each others country. also known as an "economic community" |
| Multinational Company (MNC) | an organization that does business in several countries |
| Home Country | Where the home office of a Multinational Company is located |
| Host Country | The foreign country where a multinational country places business activities |
| Global strategy | using the same product and marketing strategy worldwide. |
| Multinational Strategy | treats each country market differently |
| Licensing | selling the right to use some intangible property(production process, trademark, or brand name) for a fee or royalty |
| Franchise | the right to use a company name or business process in a specific way |
| Joint Venture | an agreement between two or more companies to share a business project |
| World Trade Organization (WTO) | created in 1995 to promote trade around the world |
| International Monetary Fund | created in 1946 to help promote economic cooperation between countries |
| World Bank | provides economic aid to less developed countries |
| Interest Rates | The cost of using someone Else's money |
| Proprietorship | a business owned and run by just one person. It is the most common form of business ownership |
| Partnership | a business owned and controlled by two or more people who have entered into a written agreement. |
| Corporation | a separate legal entity formed by documents filed with your state. Owned by one or more shareholders and managed by a board of directors |
| Partnership Agreement | a written agreement among all owners of a partnership |
| Articles of Incorporation | a written legal document that defines ownership and operating procedures and conditions for the business |
| Board of Directors | the people who will make the major policy and financial decisions for a corporation |
| Limited Liability Partnership | a partnership in which some investors cannot lose more than the amount of their investment, but are not allowed to participate in the day-to-day management of the business. |
| S-Corporation | A corporation which passes all income through to the owners based on their investment and is taxed on their individual tax returns. |
| Limited Liability Company (LLC) | A corporation which is much like a partnership and limits the liability of the owners |
| Nonprofit Corporation | a group of people who join to do some activity that benefits the public. |
| Cooperative | is formed by a group of people who cooperate to provide goods and services that they all need. It is owned by the members. |
| Franchise | a written contract granting permission to operate a business to sell products and services in a set way. |
| Franchisor | The company that owns a product or service and grants the rights to sell products and services in a set way to another business |
| Franchisee | A company that purchases the right to to sell products and services of another company in a set way |
| General Partner | plays an active role and has unlimited liability. (every partnership must have at least one general partner.) |
| Limited Partner | participates as an investor in the partnership but has limited liability. |
| Secret Partner | plays an active role but is secret from society |
| Dormant Partner | plays no role and is not know to the public |
| Silent Partner | does not have an active role but is know to the public. |
| Domestic Corporation | corporation chartered in a specific state |
| Foreign Corporation | corporation chartered in one state but doing business in another state. |
| Alien Corporation | corporation chartered in another nation but doing business in a state. |
| Public Corporation | corporation established for government purposes. |
| Private Corporation | corporation established by individuals for business or charitable purposes. |
| Management | the process of accomplishing the goals of an organization through the effective use of people and other resources. |
| Planning | involves analyzing information, setting goals, and making decisions about what needs to be done. |
| Organizing | means identifying and arranging the work and resources needed to achieve the goals that have been set. |
| Staffing | includes all of the activities involed in obtaining, preparing, and compensating the employees of a business. |
| Implementing | the effort to direct and lead people to accomplish the planned work of the organization. |
| Controlling | determines to what extent the business is accomlishing the goals it set out to reach in the planning stage. |
| Management Style | the way a manager treats and involves employees |
| leadership | the ability to motivate individual and groups to accomplish important goals |
| human relations | the way people get along with each other. |
| influence | enables a person to affect the actions of others. |
Created by:
AJCCarter