Studied by 2 people
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
Note
Flashcard