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Mixed economy.
Entrepreneurial resourcesThe initiative to combine natural, human, and capital resources
Opportunity costValue of the next-best alternative that is forgone to produce or obtain another product
CompetitorsEconomic decision-making
Economic resources
Private propertyRight to purchase, use, and discard of things of value
ServicesActivities that can be consumed at the time of purchase to satisfy needs and wants
ScarcityCondition that exists when wants or needs exceed resources available
EconomicsStudy of the decisions made for production, distribution, and consumption of goods and services to satisfy needs and wants
NeedsNecessities required for living
ConsumerNecessities required for livingBuys and uses the goods and services
Capital resourcesGoods and money used in the production of goods and services
Natural resourcesRaw materials supplied by nature
Human resourcesPeople using efforts, knowledge, and skills at work to produce goods and services
Free enterpriseEconomic system which freedom to consume and produce goods and services exists
Traditional economyEconomic system in which decisions are based on customs and centered on family
GoodsItems purchased to satisfy needs and wants
ProfitMoney left after selling goods and services and costs of operating a business have been paid
WantsGoods that are purchased to add comfort or pleasure to life
MarketplaceAnywhere goods and services exchange hands
MarketplaceProcess of giving up something for gaining something else
Market economyGoods and services are owned and controlled by the people
Freedom of choiceOpportunity to make choices of goods and services and accept consequences of decisions
Command economyEconomics system in which the government owns resources and dictates what is produced
Market priceThe point where supply and demand are equal
1.02...
DeflationA decrease in the general price level
Business CycleThe movement of an economy from one condition to another and back again
Capital Project SpendingSpending by businesses for items such as land, buildings, and equipment
Budget SurplusGovernment spends less than it takes in
DepressionA phase marked by a long period of high A unemployment, weak consumer sales, and business failures
BondRepresents debt for an organization
Personal IncomeSalaries and wages as well as investment income and government payments to individuals
GDP Per CapitaThe Gross Domestic product (GDP) divided by the total population of a country
ProductivityProduction output in relation to a unit of input, such as a worker
RecoveryThe phase in which unemployment decreases, demand for goods and services increases, and GDP begins to rise
InflationAn increase in the general price level
StockRepresents ownership in a corporation
Budget DeficitGovernment spending more than it takes in
Unemployment RateThe portion of people in the labor force who are not working
Retail SalesThe sales of durable and nondurable goods bought by consumers
ProsperityA period in which unemployment is low, businesses produce many goods and services, and wages are good
Price IndexA number that compares prices in one year with some earlier base year
RecessionA period in which demand, production, and GDP growth decreases and unemployment begins to rise
National DebtThe total amount owed by the federal government
Gross Domestic ProductThe total value of all final goods and services produced in a country in one year (GDP)
Domestic BusinessMaking, buying and selling of goods and services within a country
International Businessbusiness activities needed for creating, shipping, and selling goods and services across national borders. Also referred to as "foreign" trade or "world trade
Absolute Advantageexists when a country can produce a good or service at a lower cost than other countries
Comparative Advantagea situation in which a country specializes in the production of a good or service at which it is relatively more efficient
Importsitems bought from other countries
ExportsGoods and services sold to other countries
Foreign Debtthe amount a country owes to other countries
Balance of PaymentsThe difference in the amount of money that comes into a country and the amount that goes out of it
Positive or Favorable Balance of Paymentoccurs when a nation receives more money in a year than it pays out
Negative or Unfavorable Balance of Paymentoccurs when a nation pays out more money than it takes in in a year
Exchange Ratethe value of a currency in one country compared to the value of another
Foreign Exchange MarketBanks buying and selling different currencies
Culturethe accepted behaviors, customs, and values of a society
Infrastructurea nation's transportation, communications, and utility systems
Trade BarriersRestrictions to free trade created by governments
Formal Trade BarriersPolitical actions such as quotas, tariffs and embargoes
Informal Trade BarriersRestrictions to trade based on culture, traditions, and religion
QuotaLimits set by governments on quantities of a product that may be imported or exported
Tariffa tax that a government places on certain imported products
embargowhen the government stops the import or export of a product completely
Free Trade Zonea selected area where products can be imported duty-free and then stored, assembled, and/or used in manufacturing.
Free Trade AgreementWhen member countries agree to remove duties and trade barriers on products traded among them
common marketcompanies are free to invest in each other's country. also known as an "economic community"
Multinational Company (MNC)an organization that does business in several countries
Home CountryWhere the home office of a Multinational Company is located
Host CountryThe foreign country where a multi-national country places business activities
Global strategyusing the same product and marketing strategy worldwide.
Multinational Strategytreats each country market differently
Licensingselling the right to use some intangible property(production process, trademark, or brand name) for a fee or royalty
Franchisethe right to use a company name or business process in a specific way
Joint Venturean 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 Fundcreated in 1946 to help promote economic cooperation between countries
World Bankprovides economic aid to less developed countries
Interest RatesThe cost of using somone else's money
2.01...
Proprietorshipa business owned and run by just one person. It is the most common form of business ownership
Partnershipa business owned and controlled by two or more people who have entered into a written agreement.
Corporationa separate legal entitiy formed by documents filed with your state. Owned by one or more shareholders and managed by a board of directors
Partnership Agreementa written agreement among all owners of a partnership
Articles of Incorporationa written legal document that defines ownership and operating procedures and conditions for the business
Board of Directorsthe people who will make the major policy and financial decisions for a corporation
Limited Liability Partnershipa 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.
Joint Venturea unique business organization by two or more other businesses to operate for a limited time and for a specific project. It is a type of partnership.
S-CorporationA 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 Corporationa group of people who join to do some activity that benefits the public.
Cooperativeis formed by a group of people who cooperate to provide goods and services that they all need. It is owned by the members.
Franchisea written contract granting permission to operate a business to sell products and services in a set way.
FranchisorThe company that owns a product or service and grants the rights to sell products and services in a set way to another business
FranchiseeA company that purchases the right to to sell products and services of another company in a set way
General Partnerplays an active role and has unlimited liability. (every partnership must have at least one general partner.)
Limited Partnerparticipates as an investor in the partnership but has limited liablility.
Secret Partnerplays an active role but is secret from society
Dormant Partnerplays no role and is not know to the public
Silent Partnerdoes not have an active role but is know to the public.
Domestic Corporationcorporation chartered in a specific state
Foreign Corporationcorporation chartered in one state but doing business in another state.
Alien Corporationcorporation chartered in another nation but doing business in a state.
Public Corporationcorporation established for government purposes.
Private Corporationcorporation established by individuals for business or charitable purposes.
2.02...
Managementthe process of accomplishing the goals of an organization through the effective use of people and other resources.
Planninginvolves analyzing information, setting goals, and making decisions about what needs to be done.
Organizingmeans identifying and arranging the work and resources needed to achieve the goals that have been set.
Staffingincludes all of the activities involed in obtaining, preparing, and compensating the employees of a business.
Implementingthe effort to direct and lead people to accomplish the planned work of the organization.
Controllingdetermines to what extent the business is accomlishing the goals it set out to reach in the planning stage.
Management Stylethe way a manager treats and involves employees
leadershipthe ability to motivate individual and groups to accomplish important goals
human relationsthe way people get along with each other.
influenceenables a person to affect the actions of others.
informal influencethe leadership role is not part of a formal structure
formal influencethe leadership position is part of the organization's structure
ethical business practiceensure that the highest standards of conduct are observed in a company's relationships with everyone who is a part of the business or is affected by the business' activities.
core valuesthe important principles that will guide decisions and actions in the company.
Executivestop-level managers with responsibilities for the direction and success of the entire business
Mid-managersspecialists with responsibilities for specific parts of a company's operations
supervisorsthe first level of management in a business
Tactical managementa management style in which the manager is more directive and controlling
Strategic managementA management style in which managers are less directive and involve employees in decision making
mixed managementthe combined use of tactical and strategic management
position influencethe ability to get others to accomplish tasks because of the position the leader holds
reward influenceresults from the leader's ability to give or withhold rewards
expert influencearises when group members recognize that the leader has special expertise in the area
Identity influencestems from te personal trust and respect members have for the leader
Ethicsthe principles of conduct governing an individual or a group
Workforce...
Downsizinga planned reduction in the number of employees needed in a firm in order to reduce costs and make the business more efficient.
Outsourcingremoves work from one company and sends it to another company that can complete it at a lower cost.
Job Analysisa specific study of a job to identify in detail the job duties and skill requirements
Compensationthe amount of money paid to an employee for work performed
Salaries and WagesThe 2 methods of direct payment of money to an employee for work completed
BenefitsCompensation in forms other than direct payment
Incentivesystems connect the amount of compensation to the quality or quantity of an employee's performance.
Promotionthe advancement of an employee to a position with greater responsibility
transferthe assignment of an employee to another job in the company with a similar level of responsibility
terminationends the employment relationship between a company and an employee
Organizational Culturethe environment in which people work, made up of the atmosphere, behaviors, beliefs, and relationships.
Work Environmentthe physical conditions and the psychological atmosphere in which employees work
Labor Unionan organized group of employees who negotiate with employers about issues such as wages and work conditions.
glass ceilingis an artificial limit placed on minority groups moving into positions of authority and decision-making.
Occupational Outlook Handbookoffers up-to-date information about the U.S. workforce
Service-producing industriesbusinesses that perform services that satisfy tne needs of other businesses and consumers
Goods-producing industriesbusinesses that produce or manufacture products used by other businesses or purchased by final consumers
White-collar workerone whose work is more mental than physical and involves the handling and processing of information
Blue-collar workerone whose job involves a great deal of manual work including the operation of machinery and equipment or other production activities.
Technologythe use of automated machinery, electronic equipment, and integrated computer systems to help increase the efficiency of producing goods and services
Human Resourcesthe people who work for a business
Planning and staffingA human resource activity involved in identifying and filling all of the jobs in the company with qualified people
performance managementA human resource activity involved in evaluating the work of employees and improving performance through training and development
Compensation and benefitsa human resource activity involved in planning and managing payroll, personnal records, and benefits programs.
Permanent employeean employee to whom a company makes a long-term commitment.
Temporary employeean employee who is hired for a specific time or to complete a specific assignment
Full-time employeean employee who regularly works a schedule of 30 hours or more per week
Part-time employeean employee who usually works less than 30 hrs per week either through shorter hours per day or fewer days per week
Commissiona form of pay in which an employee is paid a percentage of sales for which he or she is responsible
Piece RateA form of pay in which an employee receives a specific amount for each unit of work produced
Base plus incentivecombination of a wage or salary with an additional amount based on the employee's performance
Cafeteria Planallocates a certain amount of money to each employee that can be spent on benefits
Dischargetermination of employment due to inappropriate work behavior
Layoff Temporarlytemporarty or permanent reduction in the number of employees due to changing business conditions
Personal timea few hours each month that can be scheduled for non-job activities
Family Leavea policy which allows employees to take a leave of absense to care for a sick family member, or for other personal emergencies for the birth or adoption of a child
Flextimeallows employees some choice in how their work days and hours are arranged
Job Sharingoffers one job to two people. Each person works a part-time schedule
Flex-Plansome employees can complete part or all of their work away from the business site.
Collective BargainingFormal negotiations between Unions and Management
2.03...
Extraction and CultivationA form of production in which products are obtained from nature or grown using natural resources
ProcessingA form of production which involves changing and improving the form of another product.
Manufacturing productsA form of production which combines raw materials and processed goods into finished
ManufacturingProcess Usually involves several businesses using products or raw material to create other products to be used by customers
Manufacturing ProceduresThe way manufacturers set up production to make their products
Mass ProductionAn assembly process that makes a large number of identical products using a continuous, efficient procedere
Custom ManufacturingBuilding a specific and unique product to meet the needs of one customer.
Materials ProcessingChanging the form of raw materials so the can be consumed or used to make other products.
Continuous ProcessingA form of materials processing in which raw materials constantly move through specially designed equipment changing them into a specific product useable for consumption or further manufacturing
Intermittent ProcessingA form of materials processing which uses short production runs to produce a precise amount of a variation of a product.
Product Planninga two step process involving New Product Research and Product Design
Inventory managementMaintains the supply of all resources needed for production and the products produced.
Facilities ManagementThe type of business operation associated with a business's buildings
LogisticsManaging the acquisition, movement, and storage of supplies, materials, and finished products in a business.
Schedulinginvolves determining the activities that need to be completed, the people who will complete the work, and the resources needed for the task
Safety and SecurityProtection of people and property.
Operational Plana tool for business operations which identifies how work will be done, who will do it, and what resources will be needed.
Schedulea time plan for completing activities
StandardA specific measurement against which an activity or result is judged
2.04...
Management Information System (MIS)an ordered system of processing and reporting information in an organization
Components of MIS1.Financial Information 2.Production and Inventory Information 3.Marketing and Sales Information 4. Human Resource Information
E-commerce (e for electronic)refers to conducting business transactions over the internet or other technology
Roboticsthe use of mechanical devices programmed to do routine tasks, such as those in many factories
Artificial Intelligencesoftware that enables computers to reason, learn, and make decisions. It uses logical methods similar to the methods humans use.
Expert SystemsComputer programs that help people solve technical problems
Computer-aided design (CAD)the use of technology to create product styles and designs.
Telecommutinginvolves the activities of a worker using a computer at home to do a job instead of going to their employer's place of business
Business ethicsRules about how businesses and their employees ought to behave.
Social responsibilityThe duty of a business to contribute to the well-being of a community.
EthicsPrinciples of morality or rules of conduct.
Code of ethicsA set of rules for guiding the action of employees or members of an organization.
PatentThe exclusive rights of an inventor to make, sell, and use a product or process.
TrademarkA distinctive name, symbol, word, picture, or combination of these that a company uses to identify products or services.
CopyrightProtection of the creative work of authors, composers, and artists.
Public utilityAn organization that supplies a service or product vital to all people including companies that provides local telephone service, water, and electricity.
Nonrenewable resourceA natural resource that cannot be replaced
MonopolyWhen a business has control of the market for a product or service.
Antitrust lawsLaws intended to prevent unfair business practices such as false advertising, deceptive pricing, and misleading labeling.
ContractAn agreement to exchange goods or services for something of value, usually money.
Social responsibilityrefers to the duty of a busines to contribute to the wellbeing of a community
Non-renewableresource a natural resource that cannot be replaced when used up
Conservationsaving scarce natural resources
Pollutionoccurs when the environment is tainted with the by-products of human actions
EPAEnvironmental Protection Agency enforces govt's measurable standards for water and air quality
OSHAOccupation Safety and Health Administration
Ethicsprincipals of morality or rules of conduct
Marketing the process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods, and services to create exchanges that satisfy individual and organizational objectives...
Conflict of interestcan occur when an action by a company or individual results in an unfair benefit
Interstate commercerefers to business dealings involving companies in more than one state (Regulated by the Federal Government)
Intrastate commercerefers to business dealing involving companies that do business within one state (Regulated by the State Government)
Marketing Strategy a company's plan to achieve its goals...
Intellectual propertyis purely intangible with no physical characteristics- no one can touch it.
Copyrightprotects the creative work of authors, composers, and artists
Public utilityan oranization that supplies a service or product vital to all people
Revenuegovernment income
Income taxesTaxes levied on the income of individuals and corporations
Property taxtax based on the value of property such as land and buildings
Sales taxa state or local tax on goods and services that is collected by the seller
Government borrowinggov't borrows money by selling bonds
Federal Trade Commission (FTC)enforces antitrust laws
3.01...
Target Marketa specific group of consumers that have similar wants and needs
Marketing Mixthe blending of four marketing elements-product, distribution, price, and promotion
Marketing Orientationconsiders the needs of customers when developing a marketing mix
Final Consumerspersons who buy products and services mostly for their own use
Business Consumerspersons, companies, and organizations that buy products for the operation of a business, for incorporation into other products and services, or for resale to their customers
Consumer Decision-Making Processthe specific sequence of steps consumers follow to make a purchase
Buying Motivesthe reasons consumers decide what products and services to purchase
Marketing Researchfinding solutions to problems through carefully designed studies involving consumers
Producteverything a business offers to satisfy a customer's needs
Servicesactivities that are consumed at the same time they are produced
Intangiblehave no physical form
Pricethe money a customer must pay for a product or service
Markupthe amount added to the cost of a product to set the selling price
Encoding preparing the information to be communicated...
Decodingthe receiver obtains the information from the channel and interprets it for understanding
Distributionthe locations and methods used to make a product or service available to the target market
Channel of Distributionthe route a product follows and the businesses involved in moving a product from the producer to the final consumer
Promotionany form of communication used to inform, persuade, or remind
Effective communicationthe exchange of information so there is common understanding by all participants
Personal sellingdirect, individualized communication with prospective customers to assess their needs with appropriate products and services eds and assist them in satisfying those needs
Advertisingany paid form of communication through mass media directed at identified consumers to provide information and influence their actions
Channel Membersthe businesses that take part in a channel of distribution
4.02...
Are banks like businesses?Banks are businesses because they sell services such as checking accounts, saving accounts and loans. They want to earn revenues and make profits.
Can anyone start a bank?No, not everyone can start a bank. They have to meet federal and government's state requirements. They take people's money so they must be fair. Must have enough capital.
How can people start a bank?People can start a bank, but they have to apply for charter from the federal government. If they apply to their state and the charter is granted, the bank will open as a state bank. If it is a charter from the federal government it will operate as a national association (N.A).
Is government regulation of a bank necessary?Yes, it is necessary because if a bank fails thousands of people will loose money. The government has to regulate the banking laws to assure the saftey of customers' money. State banks= state banking laws and National banks= federal law
Deposit type institutionsaccept deposits for people in the future. (main types: commercial, s&l, mutual, credit union)
Commercial banksFull service banks that offer a wide range of financial services. Bank offer checking accounts, provide savings accounts, make loans to individuals and to businesses, And offer other services. Have been opened in supermarkets and offer everything!
Federal Deposit Insurance Corporation FDICProtects depositors money in case of failure... Insures all account in same bank
Savings and Loans AssociationSpecalized in savings accounts and making loans for home mortages
Mutual Savings BankProvides a variety of services. It organized mainly savings accounts and to make loans to home buyers. Owned by depositors
Credit unionIs a user-owed, not-for-profit, cooperative financial instution. Usually formed by peeps in same company, church, community,etc. Offer other services...(NCUA- insures depositors funds in case of failure) like FDIC
Nondeposit financial institutionRefers to financial institution
Life insurance companiesPeople buy this to provide financial security for dependents. Offer financial services and helps expand business in economy
Investment companiesAllow people to choose investment opportunity for long term growth of their money.
Consumer finance companySpecializes in making loans for long lasting or durable goods and for financial emergencies
Mortages companiesProvide loans for purchasing a home or restate
Check cashing companiesPeople who don't have banks may use for check cashing outlets to cash paychecks
PawnshopsMake loans based on tangible possessions
Accepting Deposits (Financial Services)safe storage funds for the future. One of main services is they offer to keep money for safe keeping.
Interestthe amount paid for the use of money
Transferring funds (Financial Services)the ability to transfer to others is extremely important . Money in a checking account can be accessed at any time, by writing a check and this can be deposited in the account of the person who receives the checkElectronic Funds Transfer (EFT)a system through which funds are moved electronically from one account to another and from one bank to another.
ATMs (Automatic Teller MachinesHome bankingDirect depositPoint of sale transactionsLending moneySafe Deposit BoxInvestments