Questions and Answers
What is business?
What does profit mean?
Money that a business earns in sales, or revenue, minus expenses.
What does loss indicate in a business context?
Occurs when a business incurs expenses that are greater than its revenues.
Who are entrepreneurs?
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What are nonprofits?
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What are factors of production?
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What are natural resources?
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What does capital refer to in business?
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What are human resources?
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What is entrepreneurship?
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What are business environments?
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What is the economic environment?
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What is the competitive environment?
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What does speed-to-market mean?
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What is the technological environment?
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What is the social environment?
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What is the global environment?
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Define economy.
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What is economics?
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What is macroeconomics?
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What is microeconomics?
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What is fiscal policy?
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What is a budget surplus?
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What is a budget deficit?
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What is federal debt?
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Define monetary policy.
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What are federal reserve banks?
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What is M-1?
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Define currency.
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What is a checking account?
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What is M-2?
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What are time deposits?
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What is a money market mutual fund?
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Define supply in economic terms.
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What does demand refer to?
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What is capitalism?
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What are the rights of capitalism?
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Define socialism.
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Define communism.
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What are mixed economies?
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What does privatization mean?
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What is gross domestic product?
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What is the unemployment rate?
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What is the business cycle?
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What is contraction in economic terms?
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Define recession.
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What is a depression?
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Define recovery.
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What is expansion in the business cycle?
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What is inflation?
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Define hyperinflation.
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What is disinflation?
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What is deflation?
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What is the consumer price index?
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What is the producer price index?
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What is productivity?
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Define opportunity cost.
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What is comparative advantage?
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What is a trade surplus?
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What is a trade deficit?
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What are exchange rates?
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What does foreign outsourcing mean?
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What is importing?
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What is exporting?
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What is foreign licensing?
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What is foreign franchising?
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What is direct investment?
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What are joint ventures?
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What is a partnership?
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What is a strategic alliance?
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What are barriers to international trade?
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What are sociocultural differences?
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What are economic differences?
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What are political & legal differences?
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What is protectionism?
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What are tariffs?
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What are quotas?
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What are voluntary export restraints?
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What is an embargo?
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What is free trade?
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What is a trading bloc?
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What is a common market?
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What is the balance of payments?
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What is a balance of payments surplus?
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What is a balance of payments deficit?
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What is the fraud triangle?
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What are universal ethical standards?
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What is business ethics?
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What is a code of ethics?
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Who are whistle-blowers?
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What is the tragedy of the commons?
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What are stakeholders?
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What is consumerism?
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What is planned obsolescence?
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What is the Sarbanes-Oxley Act?
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What is corporate philanthropy?
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What is corporate responsibility?
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What is sustainable development?
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What is a carbon footprint?
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Study Notes
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.
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Prepare for your Business Day 1 exam with these flashcards covering essential terms and definitions. From understanding profit and loss to grasping the concept of entrepreneurs, these cards are a great tool for review. Boost your knowledge and confidence ahead of your assessment!