Economic Systems and Performance Quiz

Economic Systems

• Economies rely on four factors of production: land, labor, capital, and entrepreneurship.
• Scarcity arises from limited resources conflicting with unlimited wants.
• Four main economic systems exist: traditional, market (capitalism), command (socialism/communism), and mixed.
• Capitalism prioritizes private ownership and market forces.
• Socialism emphasizes government control.
• Communism involves complete government ownership and control.
• Privatization transfers state-owned businesses to private ownership.

Measuring Economic Performance

• Key indicators for economic performance include GDP, GNP, inflation, unemployment, and the business cycle.

International Trade and Business

• International trade involves exchanging goods and services across borders, enabling access to diverse products.
• The balance of trade compares exports and imports, showing a surplus or deficit.
• Governments use trade barriers (tariffs, quotas, embargoes) to protect domestic industries.
• Trade agreements (like NAFTA, EU, WTO) aim to reduce trade barriers.
• Businesses expand internationally through several methods, including licensing, contract manufacturing, and joint ventures.
• Important considerations for international business include political, economic, socio-cultural, and technological factors.

Management Structures and Functions

• Organizations can adopt vertical (hierarchical) or horizontal (flat) structures.
• Management encompasses planning (setting goals), organizing (resource allocation), and controlling (performance monitoring).
• Effective decision-making requires using data and insights.
• A clear mission statement defines an organization's purpose, values, and objectives.
• Motivating employees and fostering a positive work environment is critical for effective management.