Business Day 1 Exam 1 Flashcards

Business Concepts

• Business: Organizations engaged in providing goods/services with the goal of generating profit.
• Profit: Revenue from sales minus expenses, representing financial gain for the business.
• Loss: Results when expenses exceed revenue, indicating financial deficit.

Entrepreneurs and Nonprofits

• Entrepreneurs: Individuals who invest time and resources to create and manage new business ventures.
• Nonprofits: Organizations that operate similarly to businesses but aim to provide public benefits rather than profit.

Factors of Production

• Natural Resources: Materials available in nature that can be utilized for economic gain.
• Capital: Financial and manufactured resources needed for producing goods/services.
• Human Resources: Contributions of labor and creativity from individuals within an economy.
• Entrepreneurship: The act of combining other production factors to initiate business opportunities.

Business Environments

• Economic Environment: Government policies aimed at stabilizing and promoting economic growth.
• Competitive Environment: Focuses on building strong relationships with customers to enhance business sustainability.
• Technological Environment: Advances in digital technology significantly shaping business operations.
• Social Environment: Reflects collective societal values and attitudes influencing business practices.
• Global Environment: Increasing interconnectivity among various national economies due to technology and trade.

Economic Principles

• Economy: The system governing the flow of resources in society, encompassing production and distribution.
• Economics: The study of resource allocation decisions made by individuals, firms, and governments.
• Macroeconomics: Focuses on broader economic measures, such as GDP, employment rates, and taxation.
• Microeconomics: Analyzes smaller economic units like individual consumers and businesses.

Fiscal and Monetary Policies

• Fiscal Policy: Government strategies involving taxation and spending to influence the economy.
• Monetary Policy: Actions by the Federal Reserve regarding interest rates and money supply to regulate economic activity.

Trade and Globalization

• Foreign Outsourcing: Engaging foreign suppliers for product manufacturing.
• Importing/Exporting: Buying/selling goods between domestic and foreign markets.
• Foreign Licensing and Franchising: Allowing foreign firms to operate under domestic business brands and models.
• Direct Investment: Establishing or acquiring businesses in foreign countries.

Barriers to Trade

• Protectionism: Policies that limit international trade to support domestic industries through tariffs, quotas, and embargoes.
• Sociocultural, Economic, and Political Differences: Factors impacting international trade dynamics.

Economic Indicators

• Gross Domestic Product (GDP): Total market value of goods/services produced within a country during a specific time frame.
• Unemployment Rate: Percentage of the labor force seeking employment but unable to secure jobs.
• Business Cycle: Fluctuations in economic activity marked by periods of expansion and contraction.

Price and Demand Dynamics

• Inflation: Increase in average prices across the economy over time.
• Deflation: Decrease in average prices, leading to reduced consumer spending.
• Consumer Price Index (CPI): Metrics for tracking changes in consumer goods and services prices over time.

Productivity and Decision-Making

• Productivity: Evaluates the efficiency of production in relation to resource use.
• Opportunity Cost: Represents the loss of potential gain from alternative choices when one option is selected.

Economic Systems

• Capitalism: Economic structure based on private ownership and competitive markets.
• Socialism: Economic system where the government controls key resources for public welfare.
• Communism: Advocates for collective ownership of all resources managed by a centralized government.
• Mixed Economies: Incorporate elements from both planned and market economies.

Business Ethics and Responsibility

• Business Ethics: Norms defining acceptable conduct within business contexts.
• Whistle-Blowers: Employees reporting unethical or illegal actions within organizations.
• Corporate Philanthropy: Donations made by businesses to support nonprofits.
• Sustainable Development: Practices ensuring resource use meets contemporary needs without compromising future generations' resources.

Environmental and Social Issues

• Carbon Footprint: Measurement of greenhouse gas emissions generated by a firm’s operations.
• Tragedy of the Commons: Overuse of shared resources resulting in depletion, reflecting individual versus collective accountability.

Stakeholders and Consumerism

• Stakeholders: Groups with vested interests in a company's performance and outcomes.
• Consumerism: Movement advocating for consumer rights and protections.

Trade Surplus and Deficit

• Trade Surplus: Occurs when a nation's exports exceed its imports.
• Trade Deficit: Happens when imports surpass exports, leading to financial imbalance.

Economic Indicators and Trends

• Balance of Payments: Total flow of currency in and out of a country.
• Business Cycle Phases: Contraction, recession, recovery, and expansion critically assess economic health at intervals.