Intro to Business communication - FBLA - Kiana f

monetary policy and the role of the Federal Reserve System (Jerome Powell - Federal Reserve Chairman)

monetary policy uses tools such as interest rate, etc, in order to properly regulate the economy

sole proprietorship

when a person files with the government in order to create a separate entity for business ventures

joint partnership

when at least two people file to create a business

corporation

A business owned by stockholders who share in its profits but are not personally responsible for its debts

Types of funding

loans, angel investors, shareholders, royalties

50/30/20 rule - budgeting

50% to your needs, 30% to wants, 20% to savings

writing checks

fill out checks (practice)

balancing a checkbook

deposits = withdrawals + balance, check bounce if insufficient funds

Compare services provided by banks, credit unions, and other financial institutions.

Banks offer meager yield rates and high-interest rates but can offer loans. Credit Unions ... Credit cards offer incredibly high-interest rates and can offer advances, due does not incur interest until after 30 days, and should not be used for business loans.

Credit Union

Credit union: They are nonprofit entities that aim to serve their members rather than seeking to earn a profit. Credit unions often offer better savings rates, lower loan rates and reduced fees because of this.

Thrift Bank

A thrift bank-also called a Savings and Loan Association (S&L)-is a type of financial institution that specializes in offering savings accounts and originating home mortgages for consumers.

Fixed vs Variable Expense

Fixed: Doesn't change often such as electricity and utilities bill

Variable: Changes often, ex. shopping list

Balance Sheet

A=L+SE

Understand accounting basics(payable,receivable, equity etc).

valuate savings and investment options (e.g., stocks, bonds, mutual funds, real estate, etc.) to meet short- and long-term goals.

Long Term: Bonds, Conservative Mutual Funds, Real Estate

Middle: Average Stock Portfolio, Aggressive Mutual Funds

Short Term: Real Estate Cash Flow, Crypto, Individual Aggressive Stocks

Describe source of securities information

SEC, NYSE(Etc.), Bloomberg and other outlets

Compare and contrast various sources of credit.

Banks, Credit Unions, S&L's, Pawn Shops. Virtually anyone that gives you money to be payed back with interest.

Explain the advantages and disadvantages of using credit.

Advantages: little down, no interest in 30 days(Credit cards), no capital needed

Disadvantages: Need credit, need to pay back interest + Principal, can lose collateral, limitations to amount

Compute simple interest loans.

p x r x t

Explain how a good credit record can be established and maintained.

Start early and often, open credit card at 18. Can be authorized user before that. Practice making payments on time consistently. Low usage=low liability(ideally under 10% of max).

List sources of consumer information

BBB, yelp, google reviews, social medias and news outlets.

Identify rights and responsibilities of consumers and list ways to protect consumer rights.

Consumers are protected by the Consumer Bill of Rights. The bill states that consumers have the right to be informed, the right to choose, the right to safety, the right to be heard, the right to have problems corrected, the right to consumer education, and the right to service. Can be protected by legislature that cracks down on unfair trade practices.

Explain the function of organizations such as the Better Business Bureau and the Federal Trade Commission.

BBB, Serves as a review site for consumers(Not-GOV)

FTC, cracks down on violations of consumer rights(GOV)

Analyze the characteristics, motivations, and behaviors of consumers.

Extended Decision-Making. Limited Decision-Making. Habitual Buying Behavior. Variety-Seeking Buying Behavior.

Interpret financial elements to determine impact on consumer behavior.

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Describe the use of advertisements and other marketing strategies.

You pay to advertise somewhere in the hope of making more money than your principal by promotion.

Explain the importance of comparative shopping

Allows consumers to assure that they receive the best product while also at an economic price suitable. Saves money.

Describe the difference between a promotional and a clearance sale.

Clearance gets rid of unused inventory and promotional is like 10% off and is a sale to attract customers.

Define the main goals and functions of a business

Make a profit but must also take into consideration social responsibility.

Explain the difference between gross profit and net profit

Gross is before you make all the cuts that will lower your total net profit.

Needs

Things that are required in order to live. Everyone needs food, water and shelter, but today's economy also needs good education, employment, and safety.

Wants

Things that add comfort and pleasure to your life. Most products and services purchased meets more than your needs.

Goods

Things that you can see and touch. They are the products you can purchase to meet your wants and needs.

Services

Activities that are consumed at the same time they are produced.

Economic resources

The means through which goods and services are produced. Economic resources are called factors of production.

Scarcity

Not having enough resources to satisfy every need. Scarcity affects everyone, but some are affected more.

Economic decision making

The process of choosing which wants, among several options, will be satisfied.

Trade-off

When you give up something to have something else.

Opportunity cost

The value of the next-best alternative that you did not choose.

Economic system

A nation's plan for answering the three economic questions.

Command economy

The resources are owned and controlled by the government.

Market Economy

The resources are owned and controlled by the people of the country.

Traditional Economy

Goods and services are produced the way it has always been done.

Capitalism

The private ownership of resources by individuals, rather than by the government.

Consumer

A person who buys and uses goods and services.

Producers

Individuals and organizations that determine what products and services will be available for sale.

Demand

The quantity of a good or service the consumers are willing and able to buy.

Supply

Refers to the quantity of a good or service that businesses are willing and able to provide.

Market Price

The point where supply and demand are equal.

Gross Domestic Product(GDP)

It is the most widely used measure. GDP is the total dollar value of all final goods and services produced in a country during one year.

GDP per capita

Output per person. GDP per capita is calculated by dividing GDP by the total population, this shows how much money each person is expected to bring into the economy.

Unemployment rate

One economic statistic of concern. The unemployment rate is the portion of people who can work, but are not working.

Productivity

A vital source of economic growth is an increase in output per worker. Productivity is the production output in relation to a unit of input, such as a worker.

Personal income

Refers to salaries and wages as well as investment income and government payments to individuals.

Retail sales

Is measured on a monthly basis by the U.S. Department of Commerce. It tracks the sales of durable and nondurable goods bought by consumers.

Business Cycle

The movement of the economy from one condition to another and back again. They are the recurring ups and downs of GDP.

Prosperity

A period in which most people who want to work are working.

Recession

A period in which demand begins to decrease, businesses lower production, unemployment begins to rise, and GDP growth slows for two or more quarters of the calendar year.

Depression

A phase marked by a prolonged period of high unemployment, weak consumer sales, and business failures.

Recovery

The phase in which unemployment begins to decrease, demand for goods and services increases, and GDP begins to rise again

Inflation

An increase in the general level of prices. During this time, more money is required to buy the same amount of goods and services.

Price Index

A number that compares prices in one year with prices in some earlier base years. There are different types of price indexes. The most watched measures of inflation is called Consumer Price Index(CPI)

Deflation

A decrease in the general level of prices. It usually occurs in periods of recession and depression.

Capital projects

Involve spending by businesses for items such as land, buildings, equipment, and new products.

Stock

Represents ownership in a corporation. Stop ownership is commonly called equity.

Bond

Represents debt for an organization. If you purchase a corporate of government bond, you are a creditor.

Budget Surplus

When a government may spend less than it takes in. if a surplus exists, government may reduce taxes or increase spending on various programs.

Budget Deficit

When a government spends more than it takes in. Over time, deficits build up.

National Debt

The total amount owed by the federal government.

Imports

Items bought from other countries. Without foreign trade, many things you buy would cost more or not be available.

Exports:

Goods and services sold to other countries.

Balance of trade:

The difference between a country's total exports and total imports;

The Balance of Payments

The difference between the amount of money that comes into a country and the amount that goes out of it.

Exchange rate

The value of a currency in one country compared with the value in another.

Trade Barriers

Government actions can create trade barriers, which are restrictions to free trade. Three common formal trade barriers are quotas, tariffs, and embargoes.

Informal trade barriers

These situations are not based on formal government actions but they do restrict trade.

Quota

To regulate international trade, governments set a limit on the quantity of a product that may be imported or exported within a given period.

Tariff

A tax that a government places on certain imported products.

Embargoes

When a government stops the export or import of a product completely.

A multinational company (MNC)

An organization that does business in several countries. It usually consists of a parent company in a home country and divisions or separate companies in one or more host countries.

Joint Venture

An agreement between two or more companies to share a business project.

Contract:

An agreement to exchange goods or services for something of value, usually money.

Patent

Gives the inventor the sole right to make, use or sell the item for 20 years,

Copyright

Protects the creative work of authors, composters, and artists. Copyright lasts for the life of the person receiving the copyright.

Trademark

A word, letter, or symbol linked with a specific company or product. Businesses register company names, team emblems, and label designs with the government.

Public utility

An organization that supplies a service or product vital to all people.

Monopoly

When a business has control of the market for a product or service.

Antitrust laws

Prevent other unfair business practices such as false advertising, deceptive pricing, and misleading labeling.

Contingent worker

One who has no explicit or implicit contract for long-term employment.

Intermediaries

Businesses involved in selling the goods and services of producers to consumers and other businesses

Service business

Carries out activities that are consumed by its customers.

Proprietorship

A business owned and run by just one person. It is the easiest form of business to start and end.

Partnership

A business owned and controlled by two or more people who have entered into an agreement.

Corporation

A separate legal entity formed by documents filed with a state.

Partnership Agreement:

A written agreement among all owners. It details the rules and procedures that guide ownership and operations.

Articles of incorporation

A written legal document that defines ownership and operating procedures and conditions for the business.

Franchise

A written contract granting permission to operate a business and sell products and services in a set way.

Mission statement

A short specific written statement of the reason a business exists and what it wants to achieve.

Goal

A precise statement of results the business expects to achieve. Goals are used to define what needs to be accomplished and to determine if the business is successful.

Policies

Guidelines used in making consistent decisions.

Procedures

Descriptions of the way work is to be done.