Business Terms ch. 1, 2, 3, 4, 5, 14

Business (Chapter 1)

An organization or activity that provides goods or services in an effort to earn a profit.

Profit (Chapter 1)

The amount by which revenue exceeds expenses.

Loss (Chapter 1)

The amount by which expenses exceed revenue.

Revenue (Chapter 1)

Money a business receives from sales.

Entrepreneur (Chapter 1)

A person who risks time, money, and resources to start and manage a business.

Value (Chapter 1)

The relationship between a product's price and the benefits it offers customers.

Standard of living (Chapter 1)

The quality and quantity of goods and services available to a population.

Quality of life (Chapter 1)

An individual's or group's overall sense of well-being.

Nonprofit (Chapter 1)

A business-like organization whose primary goal is community benefit rather than financial gain.

Natural resources (Chapter 1)

Inputs offered by nature, such as land and raw materials.

Capital (Chapter 1)

Synthetic resources, such as tools and equipment, used to produce goods or services.

Human resources (Chapter 1)

People and their physical, intellectual, and creative contributions.

Entrepreneurship (Chapter 1)

The process of organizing and combining the factors of production.

Industrial Revolution (Chapter 1)

The period when technological advances drove rapid industrialization.

Production era (Chapter 1)

The period when firms emphasized production efficiency.

Marketing era (Chapter 1)

The period when firms emphasized brands and product differences.

Relationship era (Chapter 1)

The current emphasis on long-term customer relationships.

Speed-to-market (Chapter 1)

The rate at which a product moves from conception to commercialization.

Workforce advantage (Chapter 1)

Competitive strength gained by attracting and retaining talented employees.

Business technology (Chapter 1)

Tools businesses use to become more efficient and effective.

E-commerce (Chapter 1)

Business transactions conducted online.

Social environment (Chapter 1)

Shared values, attitudes, customs, beliefs, and demographics that affect business.

Demographics (Chapter 1)

Measurable population characteristics such as age, sex, race, and income.

Free trade (Chapter 1)

The movement of goods and services across international boundaries with few restrictions.

GATT (Chapter 1)

An international agreement designed to lower tariffs and promote freer trade.

Economy (Chapter 2)

The financial and social system through which resources flow in society.

Economics (Chapter 2)

The study of choices about allocating scarce resources.

Macroeconomics (Chapter 2)

The study of a nation's overall economic dynamics.

Microeconomics (Chapter 2)

The study of smaller economic units and markets.

Subprime mortgage (Chapter 2)

A home loan made to a borrower with weak credit.

Collateralized debt obligation (CDO) (Chapter 2)

A security created by bundling debt, including mortgage-backed assets.

Fiscal policy (Chapter 2)

Government taxation and spending decisions used to influence the economy.

Budget surplus (Chapter 2)

The amount by which government revenue exceeds spending.

Budget deficit (Chapter 2)

The amount by which government spending exceeds revenue.

Federal debt (Chapter 2)

The accumulated amount the federal government has borrowed and not repaid.

Debt ceiling (Chapter 2)

The maximum amount Congress authorizes the federal government to borrow.

Fiscal cliff (Chapter 2)

Automatic spending cuts and tax increases intended to reduce a budget deficit.

Monetary policy (Chapter 2)

Federal Reserve decisions that influence interest rates and the money supply.

Money (Chapter 2)

Anything generally accepted as a medium of exchange, measure of value, or means of payment.

M1 money supply (Chapter 2)

Currency plus checking accounts and traveler's checks.

M2 money supply (Chapter 2)

M1 plus most savings accounts, money-market accounts, and certificates of deposit.

Open market operations (Chapter 2)

Federal Reserve purchases and sales of government securities.

Discount rate (Chapter 2)

The interest rate the Federal Reserve charges banks for loans.

Reserve requirement (Chapter 2)

The minimum share of deposits a bank must hold rather than lend.

Economic system (Chapter 2)

A structure for allocating limited resources.

Capitalism (Chapter 2)

A system based on private ownership, economic freedom, and competition.

Pure competition (Chapter 2)

A market with many sellers offering nearly identical products.

Monopolistic competition (Chapter 2)

A market with many sellers offering differentiated products.

Oligopoly (Chapter 2)

A market dominated by a few major sellers.

Monopoly (Chapter 2)

A market dominated by one producer.

Natural monopoly (Chapter 2)

A market in which one supplier can operate more efficiently than competing suppliers.

Supply (Chapter 2)

The quantity producers will offer at different prices.

Demand (Chapter 2)

The quantity consumers will buy at different prices.

Equilibrium price (Chapter 2)

The price at which quantity supplied equals quantity demanded.

Socialism (Chapter 2)

A system in which government owns and operates key enterprises affecting public welfare.

Communism (Chapter 2)

A system of public ownership of all enterprises under central government direction.

Mixed economy (Chapter 2)

An economy combining market-based and planned elements.

Privatization (Chapter 2)

Converting a government-owned business to private ownership.

Nationalization (Chapter 2)

Converting a privately owned business to government ownership.

Gross domestic product (GDP) (Chapter 2)

The value of all final goods and services produced within a nation during a period.

Business cycle (Chapter 2)

The recurring expansion and contraction of economic activity.

Contraction (Chapter 2)

A period of declining economic activity.

Recession (Chapter 2)

A significant economic decline; the lecture uses two consecutive quarters of falling GDP.

Depression (Chapter 2)

A deep, long-lasting recession.

Recovery (Chapter 2)

Rising growth and employment following a contraction.

Expansion (Chapter 2)

A period of strong growth and high employment.

Unemployment rate (Chapter 2)

The percentage of the labor force without jobs and actively seeking work.

Frictional unemployment (Chapter 2)

Temporary unemployment while workers search for a better or different job.

Seasonal unemployment (Chapter 2)

Joblessness caused by predictable seasonal changes.

Cyclical unemployment (Chapter 2)

Joblessness caused by an economic downturn.

Structural unemployment (Chapter 2)

Long-term joblessness caused by a mismatch between workers' skills and available jobs.

Inflation (Chapter 2)

A broad rise in average prices.

Hyperinflation (Chapter 2)

Average monthly inflation above 50 percent.

Disinflation (Chapter 2)

A slowing rate of price increases.

Deflation (Chapter 2)

A broad fall in average prices.

Consumer price index (CPI) (Chapter 2)

A measure of changes in prices paid by an average consumer.

Producer price index (PPI) (Chapter 2)

A measure of changes in wholesale prices.

Productivity (Chapter 2)

Output produced per unit of input; output divided by input.

International trade (Chapter 3)

The exchange of goods and services across national borders.

Opportunity cost (Chapter 3)

The value of the second-best choice given up when a decision is made.

Absolute advantage (Chapter 3)

The ability to produce more with the same resources than another nation.

Comparative advantage (Chapter 3)

The ability to produce at a lower opportunity cost than another nation.

Balance of trade (Chapter 3)

The difference between the value of a nation's exports and imports.

Trade surplus (Chapter 3)

A condition in which exports exceed imports.

Trade deficit (Chapter 3)

A condition in which imports exceed exports.

Balance of payments (Chapter 3)

The total flow of money into and out of a country, including trade and financial flows.

Exchange rate (Chapter 3)

The value of one currency measured in another currency.

Countertrade (Chapter 3)

International trade that exchanges products for products instead of currency.

Foreign outsourcing (Chapter 3)

Contracting with a foreign supplier to produce goods carrying the hiring firm's brand.

Importing (Chapter 3)

Buying domestically goods that were produced or grown abroad.

Exporting (Chapter 3)

Selling abroad goods produced or grown domestically.

Foreign licensing (Chapter 3)

Allowing a foreign firm to produce or market a product or use intellectual property in a defined area.

Foreign franchising (Chapter 3)

Allowing overseas businesses to use a firm's brand and operating system under specified rules.

Direct investment (Chapter 3)

Acquiring a foreign firm or creating facilities in a foreign country.

Joint venture (Chapter 3)

An arrangement in which companies join forces to pursue a specific opportunity.

Strategic alliance (Chapter 3)

An agreement between firms to pursue an opportunity together without merging.

Infrastructure (Chapter 3)

Physical facilities and systems that support economic activity.

Protectionism (Chapter 3)

Government policies designed to restrict international trade.

Tariff (Chapter 3)

A tax imposed on imports.

Quota (Chapter 3)

A limit on the quantity of a product that may be imported.