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Entrepreneurship: The process of starting and running a new business. Goods: Tangible products such as: computers, food, clothing, cars, and appliances. Services: Intangible products (that can’t be held in your hand) such as: a parking space, education, health care, insurance, watching a movie, re...

Entrepreneurship: The process of starting and running a new business. Goods: Tangible products such as: computers, food, clothing, cars, and appliances. Services: Intangible products (that can’t be held in your hand) such as: a parking space, education, health care, insurance, watching a movie, recreation, tax preparation, haircuts and travel. Entrepreneur: A person who risks time and money to start and manage a business. (never forget an entrepreneur not only risks his or her money to launch the business...BUT...they risk time Revenue: The total amount of money a business takes in during a given period by selling goods and services. Profit: The amount of money a business earns above and beyond what it spends for salaries and other expenses Loss: When a business’s expenses are more than its revenues it has incurred a loss. (While this often happens in the short term, it cannot go on indefinitely, or the firm may go out of business) Risk: The chance an entrepreneur takes of losing time and money on a business that may not prove profitable Businesses take risks, but also, with big risks could also come big profits. Standard of Living: The amount of goods and services people can buy with the money they have. Quality of Life: The general well-being of a society in terms of its political freedom, natural environment, education, health care, safety, amount of leisure time and facilities Stakeholders: All the people who stand to gain or lose by the policies and activities of a business and whose concerns the business needs to address. Outsourcing: Contracting with other companies (often in other countries) to do some of the functions of a firm, like production or accounting Nonprofit Organization: An organization whose goals do not include making a personal profit for its owners or for its organizer Economics — The study of how society chooses to employ resources to produce goods and services and distribute them for consumption among various competing groups and individuals. Macroeconomics — The part of economics study that looks at the operation of a nation’s economy as a whole. Microeconomics — The part of economics study that looks at the behavior of people and organizations in particular markets. Invisible Hand Theory- a phrase coined by Adam Smith to describe the process that turns self-directed gain into social and economic benefits for all. So, as people improve their own situation in life, they help the economy prosper through the production of goods, services and ideas and in effect help others too. Capitalism — An economic system in which all or most of the factors of production and distribution are privately owned and operated for profit. Countries with capitalist systems: Free market — Decisions about what and how much to produce are made by the market. Consumers send signals about what they like and how they like it. EXAMPLE: the demand for smart phones sharply increases Supply — The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time. Demand — The quantity of products that people are willing to buy at different prices at a specific time. Market Price – The price determined by supply and demand. Socialism — An economic system based on the premise that some, if not most, basic businesses should be owned by the government so that profits can be more evenly distributed among the people Communism — An economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production. Mixed Economies — Economic systems in which some allocation of resources is made by the market and some allocation is made by the government. The USA is, in fact, a Mixed Economy Unemployment Rate — The number of civilians at least 16 years old who are unemployed and have actively tried to find a job within the prior four weeks. Inflation — A general rise in the prices of goods and services over time Consumer Price Index (CPI) — Monthly statistics that measure the pace of inflation or deflation. Fiscal Policy — The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending. Tools of fiscal policy: Taxation Government spending National Deficit — The amount of money the federal government spends beyond what it collects in taxes for a given fiscal year. National Debt — The sum of government deficits over time. National Surplus — When the government takes in more revenue than it spends. (very rare indeed) Monetary policy — The management of the money supply and interest rates by the Federal Reserve Bank Importing: Bringing goods or services into a country from abroad. Exporting: Sending goods or services from one country to another. Free Trade: When countries agree to trade with each other without any taxes or restrictions. Balance of Trade: The difference between how much a country exports (sells) and imports (buys). Trade Surplus: When a country exports more than it imports. Trade Deficit: When a country imports more than it exports. Balance of Payments: A record of all economic transactions between a country and the rest of the world, including trade, investments, and transfers. Dumping: Selling goods in another country at a price lower than their cost to drive competitors out of the market. Licensing: Allowing someone else to use your brand or idea for a fee. Franchising: Giving someone the right to operate a business using your brand and business model in exchange for a fee. Contract Manufacturing: Hiring another company to make your products for you. Joint Venture: When two or more businesses work together on a specific project or business, sharing the risks and rewards.  Foreign Direct Investment (FDI): Investing in businesses or assets in another country. Exchange Rate: The value of one currency compared to another. Multinational Corporation: A company that operates in multiple countries. Trade Protectionism: Policies to protect a country's own industries from foreign competition by limiting imports. Import Quota: A limit on the amount of a product that can be imported into a country. Embargo: A government order that stops trade with a specific country or the exchange of specific products. World Trade Organization (WTO): An international organization that sets rules for global trade and helps resolve trade disputes. GATT (General Agreement on Tariffs and Trade): An international agreement aimed at reducing trade barriers, which was the predecessor to the WTO. Ethics: The principles or standards that help people decide what is right and wrong. Whistleblower: A person who reports illegal or unethical behavior within an organization. Corporate Social Responsibility (CSR): When companies take actions to positively impact society and the environment, beyond just making profits. Insider Trading: Buying or selling stocks based on non-public, confidential information about a company. Social Audit: A review of how well a company is meeting its social and environmental responsibilities. Ponzi Scheme: A fraudulent investment scam where returns are paid to earlier investors using the money from new investors, rather than from profit earned.