Business Management - Chapter 1 Part 1

Business

Any activity that seeks to provide goods and services to others while operating at a profit

Profit

Revenues less Expenses

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

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

Type of economics that studies the operation of a nation’s economy as a whole

Microeconomics

Type of economics that studies the behavior of people and organizations in particular markets

Factors of production

The resources used to create wealth; land, labor, capital, entrepreneurship, and knowledge

Monopolistic Competition

The degree of competition in which a large number of sellers produce very similar products that buyers nevertheless perceive as different

Oligopoly

A degree of competition in which just a few sellers dominate the market

Demand

The quantity of products that people are willing to buy at different prices at a specific time

Supply

The quantity of products that manufacturers or owners are willing to sell at different prices at a specific time

Equilibrium Price

The market price where the quantity of a good or service that consumers want to buy exactly matches the quantity that producers want to sell

Deflation

A situation in which prices are declining

Inflation

The general rise in the prices of goods and services over time

Business Cycle

The periodic rises and falls that occur in economies over time

Recession

Two or more consecutive quarters of decline in the GDP

Fiscal Policy

The federal government’s efforts to keep the economy stable by increasing or decreasing taxes or government spending

Monetary Policy

The management of the money supply and interest rates by the Federal Reserve Bank