Business In Action: Thriving In The Digital Enterprise PDF

Business in Action: Thriving in the Digital Enterprise Tenth Edition Chapter 2 Economics, Money, and Banking Copyright © 2024, 20...

Business in Action: Thriving in the Digital Enterprise Tenth Edition Chapter 2 Economics, Money, and Banking Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved What Is This Thing Called the Economy? Economy – The sum total of all the economic activity within a given region Economics – The study of how a society uses its scarce resources to produce and distribute goods and services Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved What Is This Thing Called the Economy? Microeconomics – The study of how consumers, businesses, and industries collectively determine the quantity of goods and services demanded and supplied at different prices Macroeconomics – The study of “big picture” issues in an economy, including competitive behavior among firms, the effect of government policies, and overall resource allocation issues Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Factors of Production Factors of Production – Economic resources, including natural resources, human resources, capital, entrepreneurship, and knowledge Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Factors of Production Land Entrepreneurship Capital Labor Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Factors of Production Natural resources – Land, forests, minerals, water, and other tangible assets usable in their natural state Human resources – All the people who work in an organization or on its behalf Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Factors of Production Capital – The funds that finance the operations of a business as well as the physical, human-made elements used to produce goods and services, such as factories and computers Entrepreneurship – The combination of innovation, initiative, and willingness to take the risks required to create and operate new businesses Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved The Economic Impact of Scarcity Scarcity – A condition of any productive resource that has finite supply Opportunity cost – The value of the most appealing alternative not chosen Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Economic Measures and Monitors Economic indicators – Statistics that measure the performance of the economy – Leading and lagging Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Key Economic Indicators Indicator Implications Housing Housing is a major component of the economy, and starts each new house built triggers a cascade of demand for related goods and services, so a rise or fall in the number of new houses under construction suggests that demand for all those related goods and services will expand or shrink as well. Durable- Similar to housing starts, sales of durable goods such goods orders as cars, appliances, and machinery suggest the economic health and confidence of consumers and businesses; if orders are declining, for instance, it indicates that buyers could have a pessimistic outlook on the economy. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved  Key Economic Indicators Indicator Implications Price indexes The various consumer and producer price indexes indicate whether the economy is heating up or cooling off. Unemployment As a lagging indicator, unemployment rates rate don’t have the predictive power of other indicators, but they can confirm the direction in which the economy has moved. Gross As a measure of the total output of the domestic economy, a rising or falling GDP suggests product (GDP) trends in the overall health of business. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Price Indexes Consumer Price Index (CPI) – A monthly statistic that measures changes in the prices of a representative collection of consumer goods and services Producer Price Index (PPI) – A statistical measure of price trends at the producer and wholesaler levels Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved National Economic Output Gross domestic product (GDP) – The value of all the final goods and services produced by businesses located within a nation’s borders; excludes outputs from overseas operations of domestic companies GDP vs GNP – GNP is the value of all goods and services produced by all citizens of a country Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Economic Systems Economic system – The policies that define a society’s particular economic structure; the rules by which a society allocates economic resources Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Planned System Planned system – Economic system in which the government controls most of the factors of production and regulates their allocation – Also called a command system or command-and- control system Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Free-Market System Free-market system – An economic system in which decisions about what to produce and in what quantities are decided by the market’s buyers and sellers Capitalism – Economic system based on economic freedom and competition Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Nationalization and Privatization Nationalization – A government’s takeover of selected companies or industries Privatization – Turning over services once performed by the government to private businesses Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Government’s Role in a Free-Market System (1 of 2) Regulation – Relying more on laws and policies than on market forces to govern economic activity Deregulation – Removing regulations to allow the market to prevent excesses and correct itself over time Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Government’s Role in a Free-Market System (2 of 2) Protecting stakeholders Fostering competition Encouraging innovation and economic development Stabilizing and stimulating the economy Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Major Government Agencies Government Agency or Commission Major Areas of Responsibility Savings Deposit Insurance Fund Deposit insurance, bank resolution and recovery, trusteeship operations, and liquidation Capital Markets Board Fair and orderly functioning of the markets and protecting the rights of investors, th Turkish Competition Authority Enforcing competition laws, ensuring that practices which distort efficient market functioning are not in place Banking Regulation and Supervision Agency Ensuring safe and sound operation of banks, efficient functioning of the credit, safeguarding rights of savers Public Oversight Accounting And Auditing Standarts Determining accounting and auditing Authority standards and ethical rules, authorization, registration, and monitoring of independent auditors and audit firms. Central Bank The primary objective of the Bank is to achieve and maintain price stability. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Stabilizing and Stimulating the Economy Monetary policy para politikası – Government policy and actions taken by a central bank to regulate the nation’s money supply Fiscal policy mali politika – Strategy for the use of government revenue collection and spending to influence the business cycle Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved  Major Types of Taxes Type of Tax Levied On Income taxes Income earned by individuals and businesses. Income taxes are the government’s largest single source of revenue. Real property Assessed value of the land and structures owned by businesses and taxes individuals. Sales taxes Retail purchases made by customers. Sales taxes are collected by retail businesses at the time of the sale and then forwarded to state governments. Disputes continue over taxes on e-commerce sales made across state lines. Excise taxes Selected items such as gasoline, tobacco, and liquor. Sometimes referred to as “sin” taxes, excise taxes are implemented in part to help control potentially harmful practices. Payroll taxes Earnings of individuals to help fund Social Security and unemployment compensation. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved The Forces of Demand and Supply Demand – Buyers’ willingness and ability to purchase products at various price points – Demand curve: A graph of the quantities of a product that buyers will purchase at various prices Supply – A specific quantity of a product that the seller is able and willing to provide at various prices – Supply curve: A graph of the quantities of a product that sellers will offer for sale, regardless of demand, at various prices Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Demand Curve Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Supply Curve Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Demand - Supply Interaction Equilibrium price – The point at which quantity supplied equals quantity demanded Because the supply and demand curves are dynamic, so is the equilibrium point As variables affecting supply and demand change, so will the equilibrium price Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Demand - Supply Interaction Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Categories of Competition Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Competition in a Free-Market System Competition – Rivalry among businesses for the same customers rekabet Pure competition – A situation in which so many buyers and sellers exist that no single buyer or seller can individually influence market prices – Many small suppliers with virtually identical products; buyers have extensive choices – Low barriers to entry – No single firm large enough to influence prices – E.g., crop farming Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Competition in a Free-Market System tekelci rekabet Monopolistic competition – A situation in which many sellers differentiate their products from those of competitors in at least some small way – Few or many suppliers of varying size – Products distinguished but similar enough to be replacements; buyers have extensive choice – Market open to all with variable barriers to entry – Firms that excel in one or more aspects can have some control over price – E.g., hair dressers, fast food restaurants Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Competition in a Free-Market System Monopoly – A situation in which one company dominates a market to the degree that it can control prices – Unique product with no replacement – Extremely high barriers to entry – Supplier sets the price Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Competition in a Free-Market System Oligopoly – A market situation in which a very small number of suppliers, sometimes only two, provide a particular good or service – Products distinguished but with replacements – High barriers to entry – Individual firms have considerable price influence – E.g., soft drinks Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Business Cycles Recession – A period during which national income, employment, and production all fall; defined as at least six months of decline in the GDP Business cycles – Fluctuations in the rate of growth that an economy experiences over a period of several years Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Unemployment Unemployment rate – The portion of the labor force (everyone over 16 who has or is looking for a job) currently without a job Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Types of Unemployment Source: Data from Roger LeRoy Miller, Economics Today, 19th ed. (New York: Pearson, 2018), 147–148, 375. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Inflation and Deflation Inflation – An economic condition in which prices rise steadily throughout the economy durmadan, sürekli Deflation – An economic condition in which prices fall steadily throughout the economy ücretler düşer, fiyat iner, karlar azalır, işsizlik ortaya çıkar. (para yetersizliği) Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved The Meaning of Money Money – Anything generally accepted as a means of paying for goods and services – Serves as a medium of exchange, a unit of accounting, a store of value, and a standard of deferred value Bir değişim aracı, bir muhasebe birimi, bir değer deposu ve bir ertelenmiş değer standardı olarak hizmet eder Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved The Meaning of Money A medium of exchange !!!!! A unit of accounting A temporary store of value A standard of deferred payment Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Fiat Money and Cryptocurrency madeni karşılığı olmayan Fiat money dolaşımdaki para, itibari para (hükümet kararına dayalı) – Official currencies issued and maintained through government fiat, or proclamation ilan Cryptocurrency kripto para – currency represented by digital tokens Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Cryptocurrency The potential of cryptocurrency – As an alternative to fiat currency – As a disruptive force in global economics and politics – As a speculative investment – As a driver of potentially disruptive technologies Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved  retail money: perakende para Bankadaki bireysel müşterilerin mevduat hesaplarındaki The Money Supply paralar retail money olarak kabul edilir. Bireysel yatırımcıların borsaya yaptığı küçük ölçekli yatırımlar da retail money kategorisine girer. Money supply para arzı – The amount of money in circulation at any given point in time – M1: Cash held by the public and money deposited in checking accounts. – M2: M1 + savings accounts, balances in retail money market mutual funds, and small-time deposits M1: Anında kullanılabilir para (nakit ve vadesiz mevduatlar). M2: M1'in yanı sıra, tasarruf hesapları, perakende para piyasası fonları ve küçük vadeli mevduatları da içerir. M2, M1’e göre daha geniş bir para arzı tanımıdır, ancak likidite düzeyi biraz daha düşüktür çünkü bu paranın bir kısmı hemen kullanılabilir değildir (örneğin, tasarruf hesaplarındaki paralar gibi). Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Central Bank 5 responsibilities of the CB – Price stability – Financial stability – Exchange rate regime – Printing and issuing of notes – Payment systems Source: The Federal Reserve System: Purposes & Functions, 10th ed. (Washington, D.C.: Board of Governors of the Federal Reserve system, 2016), 1. Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Central Bank Policy Rate – CBs self-set the rate at which it lends to banks on short-term basis to maintain liquidity and at which it borrows to reduce liquidity. – This is the policy rate; currently set for 1-week repos. Exchange rates – Floating exchange rate since 2001 – Merkez Bankaları, likiditeyi korumak için bankalara kısa vadeli olarak borç verdiği ve likiditeyi azaltmak için borç aldığı oranı kendileri belirler. – Bu, şu anda 1 haftalık repo için belirlenen politika oranıdır. Döviz kurları – 2001'den beri dalgalı döviz kuru Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Investment Banking Investment banks – Firms that offer a variety of services related to initial public stock offerings, mergers and acquisitions, and other investment matters Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved Commercial Banking and Other Financial Services Commercial banks – Financial institutions that accept deposits, offer various types of checking and savings accounts, and provide loans Retail banks – Banks that provide financial services to consumers Copyright © 2024, 2020, 2017 Pearson Education, Inc. All Rights Reserved