Business Economics Quiz

Inflation

• Inflation is an increase in the price of most goods and services.
• The inflation rate has increased by 2.9% since last year.
• Since February 2020, there has been a 20% increase in the price of goods and services.
• When the inflation rate is 2%, the economy is considered to be in good shape.

Businesses

• Any activity that seeks to make a profit through selling goods or services.
• Businesses either seek to make a profit or earn enough money to cover expenses.
• The success of a business is based on finding a need and filling it.

Revenue - Expense = Profit

• The more revenue a business has, the more profitable it is.
• Expenses are the costs associated with running a business.

Certainty, Risk, and Uncertainty

• Certainty is perfect knowledge without the possibility of error.
• Risk is the possibility of loss or damage.
• Uncertainty is a lack of knowledge about the future.
• A clear business objective provides clarity on the business goals.

Stakeholders

• Anyone impacted by a company.
• Shareholders own stock in a company.
• Shareholders benefit when a company is successful because they receive dividends or a higher price for their shares when they sell them.

Measures of Economic Condition

• GDP (Gross Domestic Product) is the total value of goods and services produced in a country.
• CPI (Consumer Price Index) measures the monthly price changes of a basket of consumer goods and services.
• PPI (Producer Price Index) measures the prices of goods purchased in large quantities for resale.
• Unemployment Rate is the level of jobless people actively seeking work.
• Types of Unemployment:
  • Friction Unemployment occurs when people are between jobs or entering the workforce for the first time.
  • Structural Unemployment occurs when there is a mismatch between the skills of workers and the jobs available.
  • Cyclical Unemployment occurs during economic downturns.
  • Seasonal Unemployment is associated with periods of high or low demand for certain types of labor.

Organizations

• Groups of people who work together to achieve a specific purpose.

Roles Businesses Play in Society

• Increase the standard of living by providing people with more goods and services.
• Improve the quality of life, which refers to wellbeing.
• Standard of living is determined by how much goods and services people can buy.
• Quality of life is determined by overall wellbeing.

How Businesses Support Community Interests

• Businesses produce goods and services.
• Businesses provide paychecks and benefits.
• Businesses pay taxes that support government spending.
• Businesses often donate to charities.

Entrepreneurship

• Taking a risk to start a new business.

Factors of Production

• Factors of production are the resources needed to produce goods and services.
• They include:
  • Entrepreneurship
  • Natural Resources
  • Capital (machines, tools, buildings)
  • Human Resources (labor)
  • Knowledge

Forces of the Business Environment

• The business environment is constantly changing.
• The following forces shape the business environment:
  • Economic: tensions between government regulation and freedom to operate
  • Technological: increases productivity but can decrease security
  • Competitive: businesses must compete for customers, employees, and investors
  • Social: demographics affect the number of consumers
  • Global: currency exchange rates, embargoes, and trade impact businesses
  • Legal/Regulatory/Political: laws and policies affect the way businesses operate

Private Equity and IPOs

• Private equity is an investment made in private companies or assets.
• IPO (initial public offering) is when a privately held company first sells shares of its company to the public on a stock exchange.

Importance of the Macroenvironment

• The macroenvironment is the arena of forces that encourage or discourage the development of business.
• It has impacts on:
  • Employees
  • Customers
  • Security and Privacy
  • Revenue
  • Productivity
  • Economic Freedom

Investors, Employees, and Competitive Advantage

• Investors are the owners of a company.
• Employees are key stakeholders in a business who provide labor, services, and shape the company culture.
• Competitive advantage is the ability to produce goods or services more effectively than competitors.

Global Impact on Business

• Globalization is the process of increasing interconnectedness between nations.
• The global market is highly dynamic and can be influenced by:
  • Changes in exchange rates
  • International trade agreements
  • Changes in tariffs
  • Immigration policies
  • Environmental regulations
  • Military alliances.

Global Brand Success Factors

• A successful global brand must:
  • Have a strong brand identity.
  • Understand and adapt to local markets.
  • Offer high-quality products or services.
  • Have a strong distribution and supply chain
  • Avoid discrimination
  • Prioritize human needs through human-centric design

Large Language Models (LLMs)

• LLMs are using deep learning to understand and decode the relationships between words, phrases, and other human language elements.

Cloud Computing

• Provides on-demand access to computing services on the Internet.
• Businesses use Cloud Computing to store, process, and analyze data remotely.
• Benefits of cloud computing are:
  • Reduced operational costs
  • Increased scalability
  • Increased flexibility
  • Increased efficiency

Platforms

• Amazon Web Services (AWS)
• Microsoft Azure
• Google Cloud Platform

Augmented and Virtual Reality

• Augmented and Virtual Reality enhances of replaces the perception of reality.
• Benefits: enhance customer experience, revolutionize employee training, foster product design, redefine marketing approaches

Big Data and Analytics

• Big data and analytics utilize the collection, storing, and analyzing of complex data sets to discover trends and insights.

PEST analysis

• PEST analysis considers four external forces that can impact a business:
  • Political forces (new laws, regulations, and political instability)
  • Economic forces (economic growth, interest rates, inflation, exchange rates)
  • Social forces (changes in demographics, lifestyles, and social values)
  • Technological forces (new technologies, innovations, and advances)
  • PEST analysis is used to understand the overall environment in which a business operates.

Ethics

• Ethics are principles of right and wrong that guide an individual's behavior.
• Laws are rules of conduct or action.
• Ethical behavior is not always legal and vice versa.
• Types of Actions:*
• Legal and Ethical: actions that are both legal and ethical.
• Legal but Unethical: actions that are legal but violate common ethical standards.
• Illegal and Unethical: actions that are illegal and unethical.
• Illegal but Ethical: actions that are illegal but are morally sound.

Building an Ethical Culture

• Top managers should establish an ethical culture by:
  • Setting an ethical example.
  • Creating an ethical hiring culture.
  • Creating ethical codes and providing training.
  • Rewarding ethical behavior.

Codes of Ethics

• Sets of ethical standards to guide an organization's actions.
• They provide guidance on treating customers, suppliers, and competitors.
• They list prohibited behaviors.

Whistleblowers

• Employees who report organizational misconduct to government or public.

Sarbanes-Oxley Act

• The Sarbanes-Oxley Act protects whistleblowers from retaliation.

Diversity

• The differences that individuals bring to a workplace.
• Diversity promotes:
  • A broader range of perspectives
  • Enhanced decision-making
  • Improved problem-solving

The Diversity Wheel

• The Diversity Wheel is a model used to understand the different dimensions of diversity.

• Dimensions include:

  • Personality: Personality traits that influence how individuals interact with others.
  • Internal: Visible characteristics that can shape an individual's experiences with discrimination, prejudice, and marginalization.
  • External: Social and economic factors that influence access to resources and opportunities.
  • Organizational: Identity within an organization that shapes power, influence, and recognition.
  • Era: Beliefs, values, and attitudes that shape an individual's experiences with conflict.

Cognitive Diversity

• Utilizes different experiences and perspectives to improve problem-solving.

Workplace Equity

• Aims to ensure that all employees have access to the same opportunities, including fair pay, promotions, and recognition.

Accessibility

• Companies can enhance accessibility by:
  • Conducting an accessibility audit.
  • Providing accommodations, such as assistive technology and physical modifications.
  • Creating a culture of inclusion.
  • Compliant with accessibility laws.