intro to buisness ch 1-5

if too many products are produced and there are too few buyers able to buy them, then ___ will occur

deflation

Mark graduated from college a short time ago and is still looking for his first job. Mark is part of the unemployment category known as ___ unemployement

frictional

what are the 4 different degrees of competition within free markets?

* monopolistic competition
* monopolies
* perfect competition
* oligopolies

when the government makes almost all economic decisions and owns almost all the major factors of production, the country is considered to be under the political system called ____

communism

the businesses that contribute to the quality of life and standard of living in a country are part of its:

economic system

command economies that combine freer markets and some government control, as in China, have systems known as

state capitalism

when it comes to getting involved in international business what are the three strategies that require the least amount of commitment and effort?

licensing, exporting and franchising

buyers and sellers negotiate prices for goods and services through supply and demand in a

free market

**[BLANK]** advantage is a monopoly that exists when a country is the only sources of an item, the only producer of an item or the most efficient producer of an item while **[BLANK]** advantage is the basis of the most international trade, when a country specializes in products that it can supply more efficiently or at a lower cost than it can produce other items

absolute, comparative

what entry strategy gives a firm the right to manufacture another firm’s product or use its trademark for a royalty fee?

licensing

Carlyle called economics the “dismal science” after reading the early work of

Thomas Malthus

In the US, businesses are able to rely on the law to enforce contracts if they comply with the

Bill of Rights

according to some economists, economics can be defined as the allocation of ____ resources

scarce

if you are studying the operation of a nation’s economy as a whole, you are learning about

macroeconomics

a benefit of free markets is that it

allows for open competition among companies

according to adam smith, the process that turns self-directed gain into social and economic benefit for all is the ____

invisible hand

in a free market, prices are determined by ___

buyers and sellers negotiating in the marketplace

the unemployment rate refers to the percentage of civilians at least 16 years old who are **[BLANK]** and **[BLANK]**

unemployed, tried to find a job within the prior 4 weeks

the periodic rises and falls that occur in economies over time are called

business cycles

a \[BLANK\] \[BLANK\], or trading bloc, is a regional group of countries with a common external tariff, no internal tariffs, and coordinated laws to facilitate exchange among members

common market

when the value of a currency is fixed by supply and demand it is the system known as \[BLANK\] \[BLANK\]

floating exchange

studying the economic behavior of individual people and organizations in markets for particular products or services is \[BLANK\]

microeconomics

by increasing or decreasing taxes or government spending, the government is affecting \[BLANK\] policy to keep the economy stable

fiscal

an embargo

bans all trade with a particular country and bans all trade of a certain product

the five \[BLANK\] of \[BLANK\] are land, labor, capital, entrepreneurship, and knowledge

factors, production

what is the study of how resources are distributed for production of goods and services within a social system called?

economics

\[BLANK\] tariffs are designed to raise money for the government

revenue

when here are many sellers in a market and none are large enough to control the price of a product, then ___ competition exists

perfect

the outcome of FDI is a foreign subsidiary, a company located in a different country from the ___ country

parent

what are two characteristic of monopolistic competition?

* there are a large number of sellers in the market
* products are perceived as different by the buyers

according to mark Benioff, an economic system that benefits all major stakeholders so they share in the benefits of capitalism is

compassionate capitalism

over time, as negotiation occurs between buyers demanding products and sellers supplying products, the ___ will be determined

market price

what occurs in contract manufacturing?

a foreign company produces private-label goods to which a domestic company then attaches its own brand name or trademark

business

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

goods

tangible products

services

intangible products

entrepreneur

a person who risks time and money to start and manage a business

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’ expenses are more than its revenue

risk

the chance an entrepreneur takes in losing time and money on a business that may not prove profitable

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 enviorment, education, health care, safety, amount of leisure and rewards that add to the satisfaction and joy that other goods and services provide

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 or all of the functions of a firm, like its production or accounting tasks

factors of production

the resources used to create wealth: land, labor, capital, entrepreneurship and knowledge

business environment

the surrounding factors that either help or hinder the development of businesses

e-commerce

the buying and selling of goods over the internet

demography

the statistical study of the human population with regard to its size, density and other characteristics such as age, race, gender and income

greening

the trend toward saving energy and producing products that cause less harm to the enviorment

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 concerned with large-scale or general economic factors, such as interest rates and national productivity.

microeconomics

the part of economics study that looks at the behavior of people and organizations in particular markets

resources development

the study of how to increase resources and to create the conditions that will make better use of those resources

invisible hand

a phrase categorized by Adam smith to describe the process that turns self-directed gain into social and economic benefits for all

capitalism

an economic system in which all or most of the factors of production and distribution are privately owned and operated for profit

state capitalism

a combination of freer markets and some government control

supply

the quantity of products that manufactures 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

perfect competition

the degree of competition in which there are many sellers in a market and none is large enough to dictate the price of a product

monopolistic competition

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

oligopoly

a degree in which just a few sellers dominate the market

monopoly

a degree of competition in which only one seller controls the total supply of a product or service, and sets the price

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

brain drain

the loss of the best and brightest people to other countries

communism

an economic and political system in which the government makes almost all economic decisions and owns almost all the major factors of production

free-market economies

economic systems in which the market largely determines what goods and services get produced, who gets them and how the economy grows

command economies

economic systems in which the government largely decides what goods and services will be produced, who gets them and how the economy grows

mixed economies

economic systems in which some allocation of resources is made by the market and some by the government

gross domestic product (GDP)

the total value of final goods and services produced in a country in a given year

gross output (GO)

a measure of total sales volume at all stages of production

disinflation

a situation in which price increases are slowing down

deflation

a situation where prices are declining

stagflation

a situation when the economy is slowing but prices are going up

consumer price index (CPI)

monthly statistics that measure the pace of inflation or deflation

core inflation

CPI minus food and energy costs

producer price index (PPI)

an index that measures the change in prices at the wholesale level

recession

two or more consecutive quarters of decline in the GDP

depression

a severe recession usually accompanied by deflation

fiscal policy

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

Keynesian economic theory

the theory that a government policy of increasing spending and cutting taxes could stimulate the economy into a recession

monetary policy

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

importing

buying products from another country

exporting

selling products to another country

free trade

the movement of goods and services among nations without political or economic barriers

comparative advantage theory

theory that states that a country should sell to other countries the products that it produces most efficiently and effectively, and buy from other countries those products it can’t produce effectively or efficiently

absolute advantage

the advantage that exists when a country has a monopoly on producing a specific product or is able to produce it more efficiently than all other countries

balance of trade

the total value of a nations exports compared to its imports over a particular period

trade surplus

a favorable balance of trade, occurs when the value of a country’s exports exceeds that of its imports

trade deficit

an unfavorable balance of trade, occurs when the value of country’s imports exceeds that of its exports

balance of payments

the difference between money coming into a country (from exports) and money leaving the country (for imports) plus money flows from other factors such as tourism, foreign aid, military expenditures and foreign investment

dumping

selling products in a foreign country at lower prices than those charged in the producing country

licensing

a global strategy in which a firm (the licenser) allows a foreign company (the licensee) to produce its product in exchange for a royalty fee

contract manufacturing

a foreign company’s production of private-label goods to which a company then attaches its brand name or trademark, part of the broad category of outsourcing

joint venture

a partnership in which two or more companies (often in different countries) join to undertake a major project

strategic alliance

a long-term partnership between two or more companies established to help each company build competitive market advantages

foreign direct investment (FDI)

the buying of permanent property and businesses in foreign nations

foreign subsidiary

a company owned in a foreign country by another foreign country, called the parent company

multinational corporation

an organization that manufactures and markets products in many different countries and has multinational stock ownership and multinational management

sovereign wealth funds (SWFs)

investment funds controlled by governments holding large stakes at foreign companies